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Gourmet Burger Sector Report January 2016

EXECUTIVE SUMMARY ...... 5 Research background ...... 5 Key findings ...... 5 Recommendations ...... 6 INTRODUCTION ...... 7 Background ...... 7 AIMS OF THE RESEARCH ...... 7 OVERVIEW OF THE RESEARCH DESIGN ...... 8 The beef burger market landscape ...... 8 The beef burger foodservice customer ...... 8 Market drivers...... 8 Online surveys...... 9 STRUCTURE OF THE REPORT ...... 9 Terminology ...... 10 Fast food burger restaurant ...... 10 Gourmet burger ...... 10 Gourmet burger bar ...... 10 Risky burgers ...... 10 Abbreviations ...... 10 GOURMET BURGER BAR MARKET CHARACTERISTICS ...... 11 Introduction ...... 11 Background ...... 11 STRUCTURE OF THE MARKET ...... 12 Two leading players stand out in a fragmented market...... 12 New wave of entrants since 2010 ...... 12 Gourmet burgers pale in comparison to fast food burger outlets ...... 12 Figure 1: Leading gourmet burger restaurant chains, by outlet numbers, August 2015 ...... 12 Leading chains’ turnover ...... 13 Fragmented nature of the market is apparent in operators qualifying as ‘small’...... 13 GBK and Byron lead the fragmented market ...... 13 Figure 2: Leading gourmet burger restaurant chains, by turnover, 2010-2014 ...... 14 Planned expansion ...... 15 Many leading chains plan to grow ...... 15 London remains main hub for gourmet burger bars ...... 15 Rising property prices are a growing barrier ...... 15 Market continues to attract international entrants ...... 16 Acquisitions suggest investor confidence in the market ...... 16 Some operators look beyond burgers ...... 16 Figure 3: Leading gourmet burger restaurant chains’ expansion plans, August 2015 ...... 17 MARKETING ...... 17 Above-the-line advertising spend ...... 17 Figure 4: Recorded above-the-line online, display and direct mail total advertising expenditure by leading identified gourmet burger operators and leading burger bar chains, 2011-15 ...... 18 Social media presence ...... 18 Figure 5: Social media presence of the leading identified gourmet burger operators and leading burger bar chains, October 2015 ...... 18 RISKY BURGERS AT LEADING CHAINS ...... 19 Methodology ...... 19 Most leading chains serve burgers medium or pink ...... 20 Figure 6: Mentions of pink/medium burgers being available at leading identified gourmet burger operators’ venues, October 2015 ...... 20 Figure 7: Menu descriptions referencing pink/medium burgers, October 2015 ...... 20 CONCLUSIONS ...... 21 COMPETING AND ALTERNATIVE CHANNELS...... 22 Introduction ...... 22 Fast food venues ...... 22 Price points ...... 22 Operating format ...... 22

Gourmet Burger Sector Report January 2016

Customer aspiration to trade up ...... 23 Figure 8: Agreement with the statement “If I had more money I would eat at other food outlets/restaurants more instead of fast food restaurants”, by gender, age group and location, May 2015 ...... 23 McDonald’s explores customised and gourmet burgers ...... 23 Consumer interest in gourmet burgers at fast food venues ...... 23 Thicker burgers and premium breads appeal at fast food venues ...... 24 Figure 9: Fast food restaurant menu enticements, May 2015 ...... 25 Pubs ...... 25 Burgers are a menu staple at pubs ...... 25 Their scale makes pubs a significant channel ...... 25 Figure 10: Visiting a pub to eat in, at least once a month, by age group, gross households income and region, March 2015 ...... 26 Other fast casual venues ...... 27 Burgers at barbecue venues ...... 27 Figure 11: Selected barbecue and American style restaurant chains, outlet numbers and expansion plans, August 2015 ...... 27 Burgers at mainstream venues ...... 27 Competition from other fast casual concepts ...... 28 CONCLUSIONS ...... 28 GOURMET BURGER BARS - CUSTOMER PROFILE ...... 30 Introduction ...... 30 Overall usage of gourmet burger bars ...... 30 Figure 12: Fast food outlet/restaurant usage, May 2015...... 30 Key demographic groups of gourmet burger bar users ...... 31 Age ...... 31 Figure 13: Burger restaurant usage and gourmet burger bar usage, by age group, May 2015 ...... 31 Income ...... 32 Figure 14: Burger restaurant usage and gourmet burger bar usage, by gross household annual income, May 2015 ...... 32 Location ...... 33 Figure 15: Gourmet burger bar usage, by region, May 2015 ...... 34 CONCLUSIONS ...... 34 BEEF BURGER FOODSERVICE CONSUMER PROFILE ...... 35 Introduction ...... 35 Uptake of beef burgers in foodservice ...... 35 Uptake in foodservice - demographics...... 36 Figure 16: Beef burger uptake at foodservice venues in the past three months, by selected demographics, October 2015...... 36 Beef burgers - venues ...... 37 Venues – demographics ...... 37 Figure 17: Venues from which diners have eaten beef burgers in the past three months, October 2015 ...... 38 Beef burgers – preferred cooking level ...... 38 Preferred cooking level - demographics ...... 38 Figure 18: Preferred cooking level of a beef burger, October 2015 ...... 38 Medium/rare beef burger consumption in foodservice ...... 39 Figure 19: Eating medium or rare beef burgers from foodservice venues in the last two weeks, by age group, location, socio-economic group and financial situation, October 2015 ...... 39 Reasons for preferred cooking level ...... 40 Methodology ...... 40 Well-done burgers ...... 40 Figure 20: Reasons for preferring a well-done beef burger, October 2015 ...... 41 Medium burgers ...... 41 Figure 21: Reasons for preferring a medium beef burger, October 2015 ...... 41 Medium-rare burgers ...... 42 Figure 22: Reasons for preferring a medium-rare beef burger, October 2015 ...... 42 CONCLUSIONS ...... 42 MARKET DRIVERS ...... 43 Introduction ...... 43 Rising incomes bode well for gourmet burger venues...... 43 Figure 23: Average weekly earnings and RPI, year-on-year % change, January 2007-August 2015 ...... 43

Gourmet Burger Sector Report January 2016

GBK enjoys a stronger aspirational image than fast food chains ...... 44 Brand research methodology ...... 44 GBK enjoys stronger premium associations ...... 44 Figure 24: Brand image – micro image, McDonald’s, Burger King and GBK, June 2015 ...... 45 Lack of growth among 15-34s ...... 45 Figure 25: Trends in the age structure of the UK population, 2010-20 ...... 46 Gourmet burgers widely seen as healthier than fast food ...... 46 Figure 26: Agreement with the statement “I eat what I like and don't worry too much about how healthy my diet is”, March 2012-August 2015 ...... 46 Diners look for indulgence on special occasions ...... 47 Figure 27: Consumer expectations of dining out occasions, April 2014 ...... 47 Three in ten think restaurants should have the option to cook burgers rare ...... 48 The high-margin, quick turnaround dish appeals to operators ...... 48 Changing foodservice trends ...... 48 Comparison to the US market ...... 49 CONCLUSIONS ...... 49 CONCLUSIONS ...... 50 Gourmet burger bar market remains small and fragmented ...... 50 Various venues serve thicker burgers ...... 50 Gourmet burger bars attract a small young and affluent user base ...... 50 Two in five users prefer beef burgers not fully cooked ...... 51 Market drivers ...... 51 APPENDIX - METHODOLOGY ...... 52 Consumer research methodology...... 52 Sampling and weighting ...... 52 Definitions ...... 53 Desk research methodology ...... 54 Nielsen Media Research ...... 54 APPENDIX - LEADING PUB OPERATORS’ BURGER OFFERING ...... 55 Figure 28: Selected leading pub operators, by outlet numbers and presence of burgers on the menu, 2015 ... 55 APPENDIX - CONSUMER SURVEY DATA – “BURGER AND CHICKEN RESTAURANTS” ...... 56 Gourmet burger bar and burger restaurant usage ...... 56 Figure 29: Burger restaurant and dourmet burger bar usage, by demographics, May 2015 ...... 56 Attitudes ...... 59 Figure 30: Agreement with the statement “If I had more money I would eat at other food outlets/restaurants more instead of fast food restaurants”, by demographics, May 2015 ...... 59 Figure 31: Agreement with the statement “I would be interested in trying gourmet burgers at fast food chains (eg McDonald's)”, by demographics, May 2015 ...... 62 Figure 32: Agreement with the statement “Gourmet burgers (eg from Gourmet Burger Kitchen) are better for you than burgers from a fast food restaurant”, by demographics, May 2015 ...... 65 Figure 33: Agreement with the statement “Burger restaurants should have the option to cook beef burgers rare”, by demographics, May 2015 ...... 68 Menu enticements...... 71 Figure 34: Chicken/burger bar menu enticements, by demographics, May 2015...... 71 Figure 35: Selected chicken/burger bar menu enticements, by demographics, May 2015 ...... 72 APPENDIX - CHICKEN AND BURGER BAR RESTAURANT USER SURVEY ...... 76

APPENDIX - BEEF BURGER FOODSERVICE CONSUMER SURVEY DATA ...... 80 Beef burger uptake ...... 80 Figure 36: Beef burger uptake at foodservice venues in the past three months, October 2015 ...... 80 Figure 37: Beef burger uptake at foodservice venues in the past three months, by demographics, October 2015 ...... 80 Venues for eating beef burgers ...... 83 Figure 38: Venues from which diners have eaten beef burgers in the past three months, October 2015 ...... 83 Figure 39: Most popular venues from which diners have eaten beef burgers in the past three months, by demographics, October 2015 ...... 83

Gourmet Burger Sector Report January 2016

Figure 40: Next most popular venues from which diners have eaten beef burgers in the past three months, by demographics, October 2015 ...... 86 Preferred cooking level of beef burgers ...... 89 Figure 41: Preferred cooking level of a beef burger, October 2015 ...... 89 Figure 42: Preferred cooking level of a beef burger, by demographics, October 2015 ...... 89 Medium or rare beef burger consumption ...... 92 Figure 43: Eating medium or rare beef burgers from foodservice venues in the last two weeks, October 2015 ...... 92 Figure 44: Eating medium or rare beef burgers from foodservice venues in the last two weeks, by demographics, October 2015 ...... 92 APPENDIX - BEEF BURGER FOODSERVICE CONSUMER SURVEY ...... 95

Gourmet Burger Sector Report January 2016

Executive Summary

Research background

Mintel was commissioned by the Food Standards Agency (FSA) to conduct research to identify potential supply and demand side factors influencing trends in the gourmet burger restaurant sector.

The FSA has identified some foods as “risky”. This includes raw burgers, i.e. burgers that would be considered deliberately less than “fully cooked”, including burgers cooked ”rare” / “medium-rare”. In particular, the Board have indicated concern about the growing trend of burgers being served rare in food service outlets, especially among niche gourmet burger restaurants. The FSA therefore wants to understand the potential drivers of market growth in the UK gourmet burger sector.

This research aimed to:  Identify potential supply and demand side factors driving growth in the gourmet burger restaurant/outlet sector;

 Understand and quantify market characteristics including the competitive landscape and key market participants;

 Understand and quantify core gourmet burger restaurant users; and

 Identify predictors of future growth in the sector, including anticipated investment, socio- demographic and macroeconomic trends and the role of changing consumer tastes. The researched comprised a review of existing in-house IP, including UK market intelligence report and the quantitative consumer survey data contained within them, as well as analyst presentations. This was supplemented by desk research across company sources, industry and consumer publications and social media. Mintel also commissioned an additional quantitative consumer survey exploring usage of beef burgers and risky burgers in the foodservice channel.

Key findings Gourmet burgers are not synonymous with burgers not being fully cooked. However, many gourmet burger venues serve their burgers as pink or ‘medium’ as standard. Gourmet burger bars are a recent phenomenon in the UK. While the market is growing rapidly, it remains a small and fragmented one. Various operators have announced expansion plans and this will bring new consumers to the market.

The penetration of gourmet burger bars is low, at just 5% of population. 16-34-year-olds, higher income households and ABs, and Londoners and urbanites are the most likely users. Although the chains are positioned as an affordable option in the dining out market, their price points appear to curb usage. As such, the predicted rise in real disposable incomes should, on balance, bring more users to the market.

The picture of potential channels of distribution of risky burgers is complicated by a number of other foodservice businesses offering thicker burgers that could be served pink or rare. The strong margins for the affordable dish bolster burgers’ appeal for foodservice operators. Longer term, the development of the UK foodservice market poses established cuisine types, including burgers, with the challenge of holding their ground against the latest trends.

Gourmet Burger Sector Report January 2016

Around half of diners are eating beef burgers in foodservice and 26% of these state having eaten a medium or rare burger in the last two weeks. Preference for medium or rare burgers is fuelled by such burgers being seen to offer a superior eating experience in terms of taste, texture and juiciness. Given that this is a view held by current burger eaters, it is likely be sustained. Consumer opinions are divided on whether burger restaurants should have the option to cook beef burgers rare, continuing to highlight the thorny issue, and the importance of customer buy-in to steps to address the potential risk posed by beef burgers.

Recommendations

Undertaking a more extensive quantitative survey would offer a means to gauge more comprehensively the size of the overall market and the extent of risk posed by risky burgers. This would need a larger sample size, and would potentially need to be run face-to-face in order to ensure all consumer segments were captured fully.

While preliminary work was undertaken within the scope of this report to established foodservice venues’ policies regarding how beef burgers are cooked, in-person visits to foodservice outlets would be recommended in order to understand how those policies are adhered to or executed on-the-ground.

Gourmet Burger Sector Report January 2016

Introduction

Background

The Food Standards Agency (FSA) has a statutory obligation to protect consumers’ public health and other interests in relation to food. Part of the FSA’s strategic role, emerging from consideration of their organisational strategy 2015-2020, is to enable consumers to make informed choices, allowing them to take greater responsibility for managing the food risks that are personal to them and that they can affect. It requires the FSA to be clear with consumers about the nature and magnitude of the various risks associated with food, the FSA’s advice to them, and consumers’ responsibility for their own food choices, particularly in relation to vulnerable groups.

At its meeting in November 2014, the FSA’s Board agreed that a new framework for the control of risky foods needed to be developed, in order to balance the provision of information to consumers to facilitate informed choice, the management of public health risks, and minimize costs to business caused by these controls. This kind of framework represents a new approach for the FSA, seeking to ensure that both food business operators (FBOs) and consumers are able take an increased responsibility in managing food risks.

The FSA has identified some foods as “risky” – this includes raw burgers, i.e. burgers that would be considered deliberately less than “fully cooked”, including burgers cooked “rare” / ”medium-rare”. In particular, the Board have indicated concern about the growing trend of burgers being served rare in food service outlets, especially among niche gourmet burger restaurants.

In light of this, the FSA is looking to conduct research to identify potential supply and demand side factors influencing trends in the gourmet burger restaurant sector.

This study was co-funded by Food Standards Scotland (FSS) - the public sector food body for Scotland. FSS were keen to explore trends in the gourmet burger market in Scotland and the profiles of the consumers who use them. Aims of the research

This research aimed to:

1) Identify potential supply and demand side factors driving growth in the gourmet burger restaurant/outlet sector in terms of: a) Marketing/advertising spend/approach b) Planned investment c) Consumer taste trends

2) Understand and quantify core gourmet burger restaurant users and market characteristics including the competitive landscape and key market participants in terms of: a) Consumer profile i.e. age, ethnicity, sex, socio-economic status b) Typical/key target groups c) The competitive landscape and key market participants

3) Identify predictors of future growth in the sector including anticipated investment, socio- demographic and macroeconomic trends and the role of changing consumer tastes, including: a) Anticipated investment b) Socio-demographic trends

Gourmet Burger Sector Report January 2016

c) Whether or not the sector is pro-cyclical d) Changing consumer tastes

The gourmet burger bar market is explored in detail in this report, having been identified as the key distribution channel for potentially risky burgers, as the nature of the product lends itself to the burger not being fully cooked. The research also aims to explore the role of other foodservice outlets, such as pubs, as potential distribution channels for risky burgers.

Overview of the research design

The beef burger market landscape

Mintel conducted an extensive review of existing in-house IP including UK market intelligence report featuring research across fast food and other relevant foodservice markets and analyst presentations.

This was supplemented by desk research across sources such as company websites, financial reports and press releases, industry and consumer publications and social media to ensure a comprehensive overview of current information specific to the market.

To identify the prevalence of risky burgers through the gourmet burger channel, Mintel conducted a review of company websites and online menus, researched online reviews and undertook trade research contacting a selection of gourmet burger outlets directly.

This enabled Mintel to develop an understanding of the gourmet burger bar market, including the competitive landscape and key market participants, marketing approaches and planned investment, as well as competing and alternative distribution channels for risky burgers. The beef burger foodservice customer To identify target consumer profiles for gourmet burger restaurants and build perspectives of consumer attitudes and behaviours within gourmet burger market, Mintel reviewed and analysed quantitative consumer survey data from existing in-house market intelligence reports focused on the chicken and burger bar foodservice market.

To develop an understanding of consumer attitudes and behaviours within the wider foodservice market, which includes both competing and alternative distribution channel for risky burgers, Mintel reviewed and quantitative consumer survey data from existing in-house UK market intelligence reports focused on related foodservice markets.

In order to quantify the prevalence of beef burger and risky burger usage within the foodservice channel, the user profile and key channels, and to explore drivers of demand for risky burgers, Mintel also commissioned an additional quantitative consumer survey exploring these issues. This was beyond the original scope of the project, but Mintel feels that it adds valuable context to the report. Market drivers To identify potential supply and demand side factors driving growth in the gourmet burger restaurant/outlet sector, the above research was analysed, as well as reviewing other relevant existing in-house IP.

Gourmet Burger Sector Report January 2016

Mintel also undertook a review of existing in-house US market research reports and analyst presentations as well as knowledge-sharing with US analysts to understand relevant consumer and market trends associated with gourmet burger food service outlets. The aim was to assess the scope to identify key learnings and trends that could be relevant for the development of the UK gourmet burger market restaurant sector. Online surveys

Across many of Mintel’s existing in-house reports, and to explore the prevalence of beef burger and risky burger usage within the foodservice channel, online panels were used.

It is important to note that conducting surveys online has some limitations. Firstly, some 14% of UK adults do not have access to the internet at home, leading to some non-coverage of the population. Secondly, people have to opt in to participate in online panels or specific studies. If the individuals opting in are systematically different from the general population, this self-selection may introduce a bias.

Controls are in place to minimise non-response bias. Furthermore, to ensure our surveys are nationally representative of internet users, Mintel sets quotas for each age group, split by gender. Mintel also sets quotas on region and socio-economic group.

Where consumer survey data is displayed in this report, the month and year of when the research was conducted and the question featured in the survey are provided with the data. Details of quotas set by Mintel for each age group, split by gender, region and socio-economic group are provided in the appendix. Structure of the report

The report is broken down into the following sections:  Chapter 2: explores characteristics of the gourmet burger bar market, including a brief history of the market, the dominant players’ outlet portfolios, turnover, marketing, and expansion plans, and the presence of risky burgers at these venues.

 Chapter 3: examines the various alternative foodservice segments that pose competition to gourmet burger bars or that represent alternative distribution channels for gourmet, and therefore potentially risky, burgers. These include fast food venues and pubs as well as other fast casual and barbecue venues.

 Chapter 4: examines the public’s current usage of gourmet burger restaurants, in terms of: 1) overall usage of gourmet burger venues compared to other chicken and burger restaurants; and 2) the demographic groups that stand out as the most likely users.

 Chapter 5: discusses the public’s current consumption of beef burgers at foodservice venues, in terms of: 1) uptake and demographic profile of users; 2) the channels used to buy beef burgers; 3) the cooking preference for a ‘perfect’ beef burger and the reasons for those preferences; 4) penetration of medium or medium rare beef burgers and the demographic profile of users.

 Chapter 6: discusses various external trends affecting the gourmet burger bar market, including the effects of the improving household incomes, changes to the age structure of the population, and consumer trends on the market.

Gourmet Burger Sector Report January 2016

 Chapter 7: presents overall conclusions and recommendations.

Further information about research methodology, research materials (e.g. questionnaires), and demographic breakdowns of key quantitative survey data is contained in the Appendices.

Terminology Fast food burger restaurant Burger bars are a sector of the fast food market. They are largely characterised by the way the leading brands operate, so that a McDonald’s or Burger King outlet typifies the burger segment. The way the market has been changing means that although the core product defines these outlets, they also tend to offer other food types such as chicken and vegetarian options. Gourmet burger The term gourmet burger was first used by gourmet burger restaurants to describe how their offering differed from that of fast food venues, with a focus on burgers freshly made on the premises and on quality ingredients. In particular, the meat patties used in gourmet burgers tend to be significantly thicker than those used in conventional fast food chains. Gourmet burgers are also typically defined by their significantly higher price points compared to fast food burgers. Gourmet burger bar Gourmet burger bar or gourmet burger restaurant are terms used to refer to specialist foodservice venues, for which gourmet burgers make up the core offering. As well as the product offering, the service format has traditionally differentiated these from fast food venues, with most gourmet burger venues serving orders at the table, not counter, and commonly providing crockery and cutlery.

However, the category is blurring both in terms of barbecue or American-style venues offering a strong burger offering and in terms of more high-priced quality-led operators entering the market that adhere to the fast food service formats. Risky burgers The term risky burger refers to beef burgers that would be considered deliberately less than “fully cooked”.

Abbreviations

FBO Food Business Operator FSA Food Standards Agency GBK The Gourmet Burger Kitchen ONS Office for National Statistics

Gourmet Burger Sector Report January 2016

Gourmet Burger Bar Market Characteristics

Introduction In this section we discuss the characteristic of the gourmet burger bar market, including a brief history of the market, the dominant players’ outlet portfolios, turnover, marketing, and expansion plans, and the presence of risky burgers at these venues.

This section discusses a selection of leading gourmet burger bar operators. These have been identified for inclusion in the analysis based on their having attracted coverage in leading UK foodservice trade publications. The list is not intended to provide an exhaustive catalogue of all operators in the gourmet burger bar segment. The market is extremely fragmented, and houses numerous small, independent local operators, putting it beyond the scope of this analysis to compile a comprehensive, robust review of all the operators.

Discussion on the operators’ expansion plans is based on information that has been made available by the chains.

The data in this section draws from research conducted for “Burger and Chicken Restaurants”, Mintel, August 2015 as well as additional research including a review of leading food service trade press and of information released by the operators in question such as in their annual accounts, press releases and on their websites.

Background Fast food burger bars have a long-established presence in the UK market. McDonald's for example opened its first restaurant in the UK in 1974. However, gourmet burger bars are a much more recent phenomenon. The largest, and oldest of the current chains, Gourmet Burger Kitchen, began operating in 2001.

Mintel’s Chicken and Burger Bars, UK – March 2006 highlighted the development of the gourmet burger bar sector as a “phenomenon worthy of attention” in 2006, indicating how, though still niche, the format had by then become identifiable. Discussing the positioning of the chains, the report notes that most shared a focus on burgers freshly made on the premises and on quality ingredients, looking to stand out from their fast food competitors. While the ‘freshly made’ proposition made it possible for the burgers to be served rare, this was a not identified as as a selling point used by the chains at the time.

The volatility of the market is exemplified by the fortunes of the chains highlighted by the report. For example, The Fine Burger Company had five sites at the time, but is now operating just one under the Prime Burger name. Hamburger Union was a three-strong chain in London, closing in 2008. Tootsies, with 26 sites, was sold in November 2005 following “disappointing sales performance”. Acquired by The Clapham House Group, a number of the outlets were converted to its GBK format, bolstering its growth.

The main exception to the rule of the early entrants having disappeared from the market since is Gourmet Burger Kitchen. The chain’s expansion was buoyed from early on by its acquisition in 2004 by Clapham House Group for £10 million, planning to grow the chain from six to 20 sites by the end of 2006, and operating 22 by April 2007.

Gourmet Burger Sector Report January 2016

Structure of the market Two leading players stand out in a fragmented market While the gourmet burger market has grown significantly since the early days, it remains a highly fragmented one, with only two operators reporting more than 50 outlets at the time of writing. The current lack of consolidation partly reflects the churn seen in the market. Only four of the current leading chains have been present for more than five years – GBK, Byron, the Handmade Burger Co and Haché.

While the two leading operators – GBK and Byron – combined account for half of the outlets of the identified operators, their sway over the market is limited. On the one hand, they continue to face mounting competition from smaller gourmet burger operators locally. On the other, they compete for the leisure pound with a raft of other venues serving gourmet-style burgers, such as pubs, and with other casual dining venues such as pizza and pasta restaurants. The competition from other segments is discussed further below. New wave of entrants since 2010 Meanwhile, the market has attracted a wave of entrants in the last five years. This includes international operators such as Five Guys, Shake Shack and Smashburger, all of which have large established operations in the US. The growth of GBK, Byron and Five Guys goes some way to show that the financial resources available for the operators to draw upon are – unsurprisingly – a key factor facilitating rapid expansion. As such, the entry of larger international players could speed up the growth in outlet numbers. Gourmet burgers pale in comparison to fast food burger outlets The list of companies included in this section is not intended to provide an exhaustive account of all operators in the market. In addition to the companies listed, the market includes numerous small local and regional operators. The companies listed here have been identified based on coverage in leading UK foodservice trade publications.

However, even with this limitation in mind, the small total number of outlets of the operators listed underlines the fact that the market is still relatively small compared to the broader foodservice market. By comparison to the 200-odd outlets of the identified gourmet burger chains, the two leading fast food burger chains, McDonald’s and Burger King, have some 1,750 outlets in the UK, combined.

FIGURE 1: LEADING GOURMET BURGER RESTAURANT CHAINS, BY OUTLET NUMBERS, AUGUST 2015

Company Parent company Number Number 1st UK Number of of UK of UK outlet identified outlets outlets opening Scottish 2010 2015 (Year) outlets

Nando’s Group Holdings 54^ Gourmet Burger Kitchen 64 2001 2 Limited Byron Hellespont Group 9^^ 52 2007 0 Five Guys Five Guys Enterprises, LLC - 29 2013 4 The Handmade Burger Co The Sargeant Partnership Ltd 6 23 2006 5 Honest Burger Honest Burgers - 9 2011 0 Burger & Lobster Restaurant - Burger & Lobster 8 2011 0 Group Ltd Meat Liquor Meatailer Ltd - 7* 2011** 0 Haché Haché Burger Connoisseurs Ltd 2 5 2004 0 Almost Famous Beautiful Drinks Ltd - 4 2012 0 Patty & Bun Patty & Bun Ltd - 3 2012*** 0 Cleaver Prezzo/TPG - 3 2013 0

Gourmet Burger Sector Report January 2016

Shake Shack Shake Shack Inc - 2 2013 0 Big Fernand Big Groupe - 1 2015 0 Fatburger Fatburger Inc - 1 2015 0 Burger Meats Bun na - 1 2013 1

Total of above 71 212 12

Note: The above list is not intended to provide an exhaustive list of all operators. In addition to the above, the market houses numerous small, independent local and regional operators. The above have been identified based on coverage in leading UK foodservice trade publications.

*Includes six burger and one chicken restaurant **Date that it opened its first restaurant, having started as a food van in 2009 ***Date that it opened its first restaurant, having previously operated a pop-up ^At March 2011 ^^At June 2010

SOURCE: COMPANY ACCOUNTS AND WEBSITES/TRADE PRESS/MINTEL

Leading chains’ turnover Fragmented nature of the market is apparent in operators qualifying as ‘small’ As discussed above, the list of companies featured in this section is not intended to provide an exhaustive account of operators in the gourmet burger bar market. However, the fragmented and emerging nature of the market becomes ever more apparent when looking at the turnover data of the identified companies.

Smashburger and Big Fernand are such new entrants that they are yet to submit accounts to the Companies House. Five other identified key operators only submitted abbreviated accounts, where turnover data is not required, because they qualify as small companies. This further signals the niche status of the operators. To qualify as a small company, a company must meet at least two of the following conditions1:

 annual turnover must be not more than £6.5 million

 the balance sheet total must be not more than £3.26 million

 the average number of employees must be not more than 50

As such, full accounts with turnover data were only available for five of the identified key operators, outlined below. The small size of many of the operators, which leads to very limited availability of turnover data, therefore reduces the scope for creating a meaningful overall market size through collating comprehensive information on the performance of the leading operators in the market. GBK and Byron lead the fragmented market For the five chains for which turnover data is available, the combined turnover comes to some £150 million in the latest period for which data is available. The longest-established players, GBK and Byron, stand in a league of their own with an annual turnover of more than £50 million each. Meanwhile, Five Guys’ rapid expansion has translated into turnover growth despite the US chain only entering the UK market in 2013, reporting a turnover of £24 million in 2014.

1 “Life of a company – part 1: annual requirements – GP2”, Companies House, July 2015

Gourmet Burger Sector Report January 2016

While the sales per outlet vary considerably from one chain to another, across the five operators these average at some £1 million. However, even if the smaller operators were achieving similar sales per outlet, the small size of the market is apparent when comparing it to the overall burger bar market, where sales in 2014 stood at £3.0 billion2.

FIGURE 2: LEADING GOURMET BURGER RESTAURANT CHAINS, BY TURNOVER, 2010-2014

GBK Ltd 2010 2011 2012 2013 2014 Year-end date 28-Mar 27-Mar 25-Mar 24-Feb (a) 23-Feb Turnover (£m, ex-VAT) 37.32 37.58 39.05 40.65 50.50 Outlets 50 54 53 57 60 Turnover per outlet (£m) 0.75 0.70 0.74 0.71 0.84

Byron Hamburgers Ltd 2010 (b) 2011 2012 2013 2014 Year -end date na 26-Jun 01-Jul 30-Jun 29-Jun Turnover (£m, ex-VAT) na 17.51 28.57 41.05 55.23 Outlets na 16 24 34 44 Turnover per outlet (£m) na 1.09 1.19 1.21 1.26

The Handmade Burger Co (The 2010 (d) 2011 2012 2013 2014 Sargeant Partnership Ltd) Year -end date na 31-Dec 31-Dec 31-Dec 31-Dec Turnover (£m, ex-VAT) na 8.70 13.00 14.33 15.24 Outlets na 5 12 14 16 Turnover per outlet (£m) na 1.74 1.08 1.02 0.95

Meat Liquour (Meatailer Ltd) 2010 (e) 2011 (e) 2012 (e) 2013 2014 Year -end date na na na 30-Jun 29-Jun Turnover (£m, ex-VAT) na na na 6.25 8.44 Outlets na na na 3 5 Turnover per outlet (£m) na na na 2.08 1.69

Total of above Turnover (£m, ex-VAT) na 63.78 80.62 105.90 153.21 Outlets 50 75 89 111 144 Turnover per outlet (£m) na 0.85 0.91 0.95 1.06

2 “Burger and Chicken Restaurants - UK”. Mintel, August 2015

Gourmet Burger Sector Report January 2016

(a) 11 months. (b) On 28 June 2010, the trade and assets of Byron Hamburgers were transferred to the Company from ASK Restaurants Limited. The results in financial statements for the period ended 26 June 2011 therefore reflect 52 weeks of trading. (c) First UK outlet opened in 2013. (d) Accounts for a small company (e) Total exemption small company accounts up to 2013.

Note: Haché Burger Connoisseurs Ltd; Almost Famous Burgers (Beautiful Drinks Limited); Patty & Bun Ltd; Honest Burgers (Pacific Shelf 1802); Burger & Lobster Restaurant Group Ltd all submitted abbreviated accounts under “Total exemption small company accounts”, with no turnover data provided.

To qualify as a small company, a company must meet at least two of the following conditions:  annual turnover must be not more than £6.5 million  the balance sheet total must be not more than £3.26 million  the average number of employees must be not more than 50

SOURCE: COMPANY ACCOUNTS /MINTEL

Planned expansion Many leading chains plan to grow

Many of the leading chains have announced plans to grow their operations, signalling their confidence in the future potential of the market. The plans suggest rapid growth for the market in the short term, with some 40 new outlets on the cards during 2015/16. This makes for a substantial addition to the 200+ identified outlets at the time of writing. However, as discussed above, such plans have previously come to an abrupt end in this market, as circumstances have changed. Among the more ambitious plans, GBK has announced that it aims to grow from the current 64 outlets to 100 by 2018.

London remains main hub for gourmet burger bars The growing presence on the market of large chains is likely to see competition heat up, with smaller operators that lack significant financial resources in the danger zone.

The market has considerable growth potential nationally, and where chains expand outside current major cities, this should continue to expand the pool of consumers with access to gourmet burgers, driving growth in the market.

However, consolidation in specific, hotly-competed areas seems likely. For example, almost all of the identified operators are present in Greater London, with more than 100 outlets between them.

Outside London, the operators listed below also have a combined seven outlets in Leeds, seven in Manchester, six in Glasgow, six in Birmingham and three in Cambridge. However, smaller companies are also operating in these markets. For example in Manchester, there are also local gourmet burger operators present, such as Solita and Filthy Cow, underlining that some of the cities are seeing levels of activity in the specialist gourmet burger bar segment that are likely to prove unsustainable. Rising property prices are a growing barrier Meat Liquor’s co-owned Scott Collins suggested in trade press in April 2015.that the US operators with heavy financial backing who are entering the market are “paying massive premiums” for locations. He also stated that the brand is “not going high street” as its ethos is centred around unusual locations, but that “even if we wanted to, we could not afford to” due to “massive brands pushing rents up.”

Gourmet Burger Sector Report January 2016

Similarly, Tom Byng, founder of Byron was quoted in an interview in September 2015 stating that it’s “very hard to find good sites with affordable rents now” and that it would be “much harder to launch and scale our business in London now.”

A focus on the same key towns and cities is to be expected given that the specialist formats will require a certain level of footfall and a certain customer demographic. However, comments such as these suggest that the rising property prices threaten to become a barrier to expansion or market entry for smaller players, or could even force smaller operators out of the market.

Market continues to attract international entrants

Among operators committed to entry, but yet to make their mark, US chain Smashburger is expected to open two outlets in 2015 and has set its sights to 35 stores in the UK. Managing Director Tim Lowther has been quoted in the trade press stating in April 2015 that the fast casual market “is yet to reach its potential” and that there is “an exciting long term future ahead with huge potential for brands such as Smashburger”. However, by October, the chain was yet to open its first location.

Another US operator, FatBurger opened its first London outlet in May 2015, stating in trade press that it had 20 UK stores in the pipeline over the next 5-7 years. The latest US player to announce entry plans was BurgerFi, which stated in July 2015 that a restaurant would open in central London by the end of the year, though no plans for further expansion has been revealed at the time of writing.

Acquisitions suggest investor confidence in the market

Also signalling investors’ confidence in the market, Active Private Equity took at 50% stake in Honest Burgers in January 2015, the founders suggesting at the time that “the opportunity is there for Honest to become a much bigger brand and Active can see that”. Byron meanwhile was acquired from the Gondola Group by investment group Hutton Collins in October 2013.

On a smaller scale, Handmade Burger Company received a £0.6 million cash injection from Finance Birmingham in July 2015 to refurbish two existing venues and help fit out its new Birmingham outlet.

Internationally, the acquisition by Jollibee Foods Corp. of a 40% stake in Smashburger in October 2015 was described by the latter as providing “additional energy and resources to Smashburger as we expand”. It should support the chain’s growth plans also in the UK. Shake Shack floated on the New York Stock Exchange in January 2015, seeing the company valued at nearly $2 billion.

Some operators look beyond burgers

However, some operators are going against this trend. For example, the London-based Meat & Shake chain moved from a burger-led to a more smokehouse-based format in May 2015, reportedly to differentiate itself in what was becoming a saturated burger market.

Meanwhile, Meat Liquor’s co-founder Scott Collins has been quoted in the trade press as describing the brand as “not a burger restaurant or a barbecue place” and as wanting it to “keep evolving”. While such a flexible approach is unlikely to mean that burgers are off the menu, it suggests that many operators are open to giving them less weight and willing to diversify their offering in response to changing consumer tastes.

Gourmet Burger Sector Report January 2016

FIGURE 3: LEADING GOURMET BURGER RESTAURANT CHAINS’ EXPANSION PLANS, AUGUST 2015

Company Operators' UK Expansion Plans Scottish Expansion Plans Almost Famous - - Big Fernand - - BurgerFi Plans one location in London by end-2015 - Burger & Lobster Four outlets planned between August and Reportedly "on the verge of signing December 2015 a deal" for first Scottish outlet in Aberdeen Burger Meats Bun - - Byron Announced in July 2015 plans for around 15 Reported plans to open a site on openings over a year. West George Street in Glasgow Fatburger 20 UK stores over 5-7 years Five Guys Liverpool Queens Sq, Cardiff Red Dragon – Dundee December 2015; Sheffield Valley, Leicester, Whiteley, Dundee – November 2015

Gourmet Burger Kitchen Plans to open in Bromley (London), Stoke on Trent, Chichester, and Newport ‘soon’. Reportedly plans to reach 100 sites by 2018 Haché Soho and Greenwich to open in ca 5-6 - months Honest Burger Reportedly hoping to expand to 14 branches - by January 2016 Meat Liquor Set to open Islington and Bristol restaurants Glasgow, 2018 in 2015. Said to aim to reach 12 sites by the end of 2017. Patty & Bun - - Shake Shack Set to open a third London site and one in - Cardiff (both in 2015/16). Looking for a ‘handful’ of London sites by 2018 and ‘eyeing’ sites in four other cities. Smashburger Teamed up with MSG Group, reportedly - plans up to 35 stores in the UK, including two in 2015 and 4-5 in 2016. The Handmade Burger Co Planned openings in Birmingham and - Nottingham will take estate to 25 sites in 2015.

Total 43 planned new openings during 2015/16

SOURCE: COMPANY ACCOUNTS & WEBSITES/TRADE PRESS/MINTEL Marketing Above-the-line advertising spend

The leading fast food burger chains are among some of the highest spending advertisers in the foodservice market. Meanwhile, the adspend by the gourmet burger brands remains decidedly modest.

The leading chain, The Gourmet Burger Kitchen remains the only operator with above-the-line spend of note over the 2011-15 period. However, even this amounts to less than £0.3 million over the January 2011-September 2015 period. To put this into context, this amounts to less than 1% of the spend by Burger King and less than 0.1% of that by McDonald’s.

Gourmet Burger Sector Report January 2016

The low above-the-line spend is another example making the small size and fragmented nature of the market evident, partly stemming from the fact that many of the operators are too small to have significant marketing budgets, lending themselves poorly to mainstream media activity. Meanwhile, the small number of outlets requires marketing to be targeted to a closely-defined geographical area, something which the mainstream media channels are poorly suited for. Many of the operators have instead looked to drive visibility online, as discussed below.

FIGURE 4: RECORDED ABOVE-THE-LINE ONLINE, DISPLAY AND DIRECT MAIL TOTAL ADVERTISING EXPENDITURE BY LEADING IDENTIFIED GOURMET BURGER OPERATORS AND LEADING BURGER BAR CHAINS, 2011-15

2011 2012 2013 2014 2015* £'000 £'000 £'000 £'000 £'000 McDonald’s Restaurants Ltd 50,656 48,446 71,961 68,685 55,338 Burger King (UK) Ltd 7,330 8,928 9,480 6,048 6,298 Gourmet Burger Kitchen 29 35 33 70 112 Handmade Burger Co 4 - - - 1 Hache Burger Connoisseurs 1 0 - - - Burger Meats Bun - - 0 - 1

Total of above 58,021 57,410 81,474 74,803 61,749

*January-September 2015

Note: There was no ad spend data recorded by Nielsen Media Research for the other operators listed above as leading gourmet burger bars. Data for McDonald’s and Burger King is provided for context.

SOURCE: NIELSEN MEDIA RESEARCH/MINTEL

Social media presence The leading gourmet burger bar operators now have an online presence as standard, including their own websites as well as a presence on social media such as Facebook and Twitter.

Research for Mintel’s Eating Out: The Digital Consumer3 report found that 78% of survey respondents used Facebook, among 2,000 internet users aged 16+. 52% of survey respondents used it at least once a day, rising to 66% among those aged 16-34. The same survey found that 45% of respondents had used Twitter, including 17% at least daily, this rising to 29% among 16-34s. This testifies to the potential reach of social media, particularly among the under-35s.

Against this background, and reflecting the typically young key audience of gourmet burger bars, the online platform offers a relatively low cost, targeted channel for them to build visibility.

However, research for the same report found that posts about a food/drink venue on social media by friends/family (eg a tweet, a 'like') had prompted just 8% diners who are social media users to use one food/drink venue over another, rising to 11% among 16-34s. As such, while the leading gourmet burger bars’ social media following is a relevant indicator of awareness, the ability of this to drive further footfall remains limited.

FIGURE 5: SOCIAL MEDIA PRESENCE OF THE LEADING IDENTIFIED GOURMET BURGER OPERATORS AND LEADING BURGER BAR CHAINS, OCTOBER 2015

Company Company website Facebook Tweets Twitter Instagram likes followers followers ‘000 ‘000 ‘000 ‘000

3 “Eating Out: The Digital Consumer - UK”. Mintel, April 2015

Gourmet Burger Sector Report January 2016

McDonald's http://www.mcdonalds.co.uk/ 59,846.2 22.0 170 n/a Five Guys https://www.fiveguys.co.uk/ 980.7 15.8 23.1 n/a Burger King http://www.burgerking.co.uk/ 219.4 3.7 15.4 0.4 Gourmet Burger http://www.gbk.co.uk/ 60.0 31.7 19.5 5.8 Kitchen Meat Liquor http://meatliquor.com/ 36.7 3.3 45.2 8.0 The Handmade http://handmadeburger.co.uk/ 33.7 17.8 13.6 3.6 Burger Co Byron https://www.byronhamburgers.com/ 26.4 31.2 21.8 7.8 Burger & http://www.burgerandlobster.com/h 23.2 6.6 27.1 11.7 Lobster ome/ Shake Shack https://www.shakeshack.com/ 10.5 8.4 17.1 13.8 Patty & Bun http://pattyandbun.co.uk/ 7.4 6.8 28.6 10.7 Haché http://www.hacheburgers.com/ 6.8 4.7 4.5 1.4 Honest Burger http://www.honestburgers.co.uk/ 4.5 11.2 28.4 9.0 Burger Meats http://www.burger-meats-bun.co.uk/ 4.2 2.2 1.6 0.9 Bun Big Fernand http://www.bigfernand.co.uk/ 2.0 1.7 1 0.4 Smashburger http://smashburger.com/ n/a* Almost Famous http://almostfamousburgers.com/ n/a** n/a n/a n/a *No separate UK account **Each venue has its own Facebook and twitter accounts account Note: Data for McDonald’s and Burger King is provided for context.

SOURCE: COMPANY WEBSITES/FACEBOOK/TWITTER/INSTAGRAM/MINTEL Risky burgers at leading chains Methodology Mintel followed a three-pronged approach to ascertain whether the identified leading chains serve pink or medium burgers:

1) a review of customer comments on third-party sites online;

2) a review of the operators’ menus;

3) calling two-three venues for each chain to request staff to describe how the burgers are served and the presence of a company-wide policy on the matter. The reviews and interviews were undertaken 22nd-31st October 2015.

It is important to note that a review of customer comments on third-party sites has some limitations, in that Mintel cannot gauge the accuracy of such reviews. However, where several reviewers have made comments on pink or medium burgers, this has been recorded the summary table below and taken as a likely indication of accurate customer experience.

Only one occasion was identified where a customer review implied that a burger was served ‘pink in the middle’, where the restaurant had stated a policy of being “unable to cook a rare burger for our customers”. In all other cases, the restaurants either had referenced raw burgers on the menu, or had not stated a policy on the menu but had referenced raw burgers in the phone interviews.

It should also be noted that the knowledge-level of staff members at individual outlets may vary, and may not reflect the chain’s policy. However, the responses from staff are likely to be indicative of the experience customers will face at the outlet level.

Gourmet Burger Sector Report January 2016

Most leading chains serve burgers medium or pink Gourmet burgers are not necessarily served rare. However, the typically thicker beef patties and the ‘connoisseur’ positioning of many of the gourmet burger venues have led to many of the identified leading operators serving their burgers as pink or cooked to ‘medium’ as standard.

Indeed, many of the venues spell this out on their menu as part of the description of the burgers, suggesting that they perceive it as selling point. For example, Byron describes its burgers on the menu as “four cuts of properly sourced British beef, ground fresh into 6oz patties and cooked medium (or however you like it).”

The founder of Byron, Tom Byng was quoted in an interview in September 2015 as stating that Byron serves 100,000 customers a week and that “the vast majority will have a hamburger”, providing some gauge of the scale of these operators.

FIGURE 6: MENTIONS OF PINK/MEDIUM BURGERS BEING AVAILABLE AT LEADING IDENTIFIED GOURMET BURGER OPERATORS’ VENUES, OCTOBER 2015

Company Mentions in Mentions on the In staff description online reviews menu of burgers by phone Gourmet Burger Kitchen Y N Y Byron Y Y Y Five Guys Y N Y The Handmade Burger Co N* N N Honest Burger Y Y Y Burger & Lobster Y N Y Meat Liquor Y Y Y Haché Y Y Y Almost Famous Y N Y Patty & Bun Y N Y** Burger Meats Bun Y N na Shake Shack Y Y na Big Fernand Y Y Y Cleaver Y Y na

Note: where there were no mentions of pink/medium burgers on the menu, this does not mean that the venue has stated that these would not be served. Rather, in most cases it means that no explicit reference was made on the menu to the serving temperature or level of cooking of the burgers.

*Most reviews talk about fully cooked, one mentions pink in the middle **Staff referenced making sure burgers are cooked at 75 degrees for 8 minutes

SOURCE: MINTEL

FIGURE 7: MENU DESCRIPTIONS REFERENCING PINK/MEDIUM BURGERS, OCTOBER 2015

Company Byron “A Byron hamburger is made to our own recipe: four cuts of properly sourced British beef, ground fresh into 6oz patties and cooked medium (or however you like it).” Honest Burger “Burgers are cooked medium/pink unless otherwise requested”

Meat Liquor “Our burgers are cooked slightly pink, please inform your burgerette if you prefer your meat well done”

Haché “All our beef steak burgers will be served medium unless requested otherwise.” Shake Shack “All burgers are cooked medium unless otherwise requested.” Big Fernand “We prepare homemade french burgers with premium meat cooked as you want from raw to burned.”

Gourmet Burger Sector Report January 2016

Cleaver “Burgers – Handmade with Ayrshire, Scottish beef, cooked medium”

SOURCE: COMPANY MENUS/MINTEL Conclusions Gourmet burger bars are a recent phenomenon in the UK foodservice market. The oldest of the current chains, Gourmet Burger Kitchen, began operating in 2001. Many of the early entrants have exited the market, evidencing its volatile nature. Gourmet burgers are not synonymous with burgers not being fully cooked. However, the typically thicker beef patties and the ‘connoisseur’ positioning of many gourmet burger venues have led to many of the identified operators serving their burgers as pink or ‘medium’ as standard.

While the market has grown significantly, it remains a fragmented one, with only two operators reporting more than 50 outlets. The lack of consolidation partly reflects churn and the entry of a wave of operators since 2010. Its fragmented and emerging nature is apparent from the fact that many companies are exempt from reporting turnover due to qualifying as ‘small’.

The combined turnover of the five chains reporting this comes to some £150 million. This compares to sales of £3.0 billion in the overall burger bar market. Various established brands and numerous large US entrants have announced ambitious expansion plans. Where the operators are moving beyond their current, largely metropolitan, base, this will bring new consumers to the market. However, many operators are currently targeting the same key cities for growth, requiring a certain level of footfall and a certain customer demographic. Nonetheless, the overlap will dampen the growth of the market as a whole. Consolidation in specific, hotly-competed areas seems likely. Some operators are diversifying their offering beyond burgers in response.

The leading fast food chains are among the highest spending advertisers in the foodservice market. The small size of the gourmet burger bar segment is apparent in the modest ad spend. However, most operators now have an online presence as standard, many attracting tens of thousands of followers.

Gourmet Burger Sector Report January 2016

Competing and Alternative Channels

Introduction In this section we discuss the characteristic of the various alternative foodservice segments that pose competition to gourmet burger bars or that represent alternative distribution channels for gourmet, and therefore potentially risky, burgers. These include fast food venues and pubs as well as other fast casual and barbecue venues.

In addition to research into current market trends, this section draws on “Burger and Chicken Restaurants - UK” report by Mintel published in August 2015 and on Mintel’s “Pub Catering – UK” report published in May 2015. Consumer research was commissioned by Mintel for both reports. Details of the survey and demographic breakdowns are provided in the appendix.

Fast food venues

Price points

Gourmet burger bars have from their inception focused on a positioning differentiated from fast food venues, concentrating on burgers freshly made on the premises and on quality ingredients.

The significantly higher price points also differentiate the gourmet venues from the fast food outlets. For example, the leading chain, Gourmet Burger Kitchen prices its standard sized burgers from £6.85 upwards4 and Byron from £6.75 upwards5. By comparison, McDonald’s long-standing ‘saver menu’ features burgers starting at £0.99, while the Big Mac typically sells for some £2.89 at the time of writing, though prices differ by location.

As discussed in the consumer section, the higher price leads to gourmet burger bars attracting a noticeably different customer profile to that seen at fast food burger restaurants, although the ubiquity and popularity of standard fast food restaurants means that there is still a sizeable overlap between the customer profiles. Broadly speaking, gourmet burger customers tend to be significantly more affluent, as well as being more likely to be urban-based.

Operating format

Another key point of difference is the operating format. The fast food chain concept has traditionally centred on customers ordering at the counter, with pre-prepared dishes enabling the order to be immediately fulfilled, translating to speed of service and relatively low staff costs.

While many gourmet burger bars have adopted the counter order format, most prepare dishes on demand as part of their USP centred on freshness. This translates to a longer waiting time for orders, while most venues provide table service. These factors play a part in the higher prices, but also create a dining experience more closely on a par with a traditional restaurant meal than a fast food meal.

In light of these differences, the performance of the fast food burger market does not lend itself as a basis for projections of the performance of the gourmet burger bar market.

4 http://www.gbk.co.uk – retrieved 23rd October 2015. 5 https://www.byronhamburgers.com – retrieved 23rd October 2015.

Gourmet Burger Sector Report January 2016

Customer aspiration to trade up Consumer research conducted for “Burger and Chicken Restaurants”, Mintel, August 2015, found that among survey respondents who had eaten in or bought a takeaway from a fast food restaurant in the three months to May 2015, 47% agreed with the statement “If I had more money I would eat at other food outlets/restaurants more instead of fast food restaurants”. The gourmet burger chains are among the most likely beneficiaries thanks to their more premium offering of the same dish.

Agreement with this statement is higher among 16-34s than older age groups and among urban dwellers than those living in suburban or rural areas. Both groups are current core users of fast food venues, making this interest in switching up a particular concern for the market.

FIGURE 8: AGREEMENT WITH THE STATEMENT “IF I HAD MORE MONEY I WOULD EAT AT OTHER FOOD OUTLETS/RESTAURANTS MORE INSTEAD OF FAST FOOD RESTAURANTS”, BY GENDER, AGE GROUP AND LOCATION, MAY 2015

Base: 1,292 internet users aged 16+ who have eaten in or have bought a takeaway from a fast food restaurant/outlet in the last three months

56 51 51 46 43 44 42 36 37

Male Female 16-34 35-44 45-64 65+ Urban Suburban Village/ rural Gender Age group Location

SOURCE: LIGHTSPEED GMI/MINTEL McDonald’s explores customised and gourmet burgers

McDonald’s has launched a table service pilot in August 2015 across 12 UK outlets with plans for further roll-out. The new service model invites customers to order from digital kiosks or staff with tablet computers, with the food delivered to their table. Diners are also able to customise their burgers with toppings such as guacamole, grilled mushrooms and different condiments.

This was followed by the launch of the Signature Collection of burgers in November 2015. Positioned as a premium range, the burgers will cost £4.69, be served in brioche-style buns and include the thickest ever patty at McDonald’s. The range is due to be trialled at 28 restaurants including outlets in London, the south and Manchester with plans for roll-out to 400 outlets next summer.

Consumer interest in gourmet burgers at fast food venues

Gourmet Burger Sector Report January 2016

In the research for “Burger and Chicken Restaurants”, Mintel, August 2015 report, 52% agreement was found for the statement “I would be interested in trying gourmet burgers at fast food chains (eg McDonald's)” among respondents who had eaten in or bought a takeaway from a fast food restaurant in the three months to May 2015. This 52% overall agreement consists of 11% who strongly agreed and 41% who agreed with the statement. The high agreement provides further evidence of the interest amongst consumers in value-added propositions in the burger market.

The sit-down dining experience, more extensive range of toppings and scope to customise the burger to taste offered by the new McDonald’s service format all make the dining experience more akin to that at gourmet burger venues. Given the consumer openness to a gourmet proposition at fast food venues, the initiative should help to curb switching up to gourmet venues as incomes rise, if it is rolled out more widely. However, the speed and scope of roll-out will partly depend on the willingness of McDonald’s franchisees to buy into the model, entailing additional costs to implement and run.

Strong agreement with the statement “I would be interested in trying gourmet burgers at fast food chains” stands at 11%, but rises to 20% among the A socio-economic group (those in higher managerial, administrative or professional employment) and to 16% among those in a financially healthy situation. That the groups best able to afford to trade up to gourmet burger venues are also the most interested in a gourmet burger offering at fast food venues further underlines the potential competition this poses to the gourmet venues.

There is a clear commercial incentive for mainstream fast food chains to adopt at least some of the characteristics associated with gourmet burger bars, both as a defensive measure against these and as a way of increasing spend among customers.

Thicker burgers and premium breads appeal at fast food venues

Closely related to the interest in gourmet burgers at fast food venues, interest in trying burgers containing thicker meat at a fast food restaurant was reported by 29% of respondents who had eaten in or bought a takeaway from a fast food restaurant in the three months to May 20156. To the extent that this opens up the scope for thicker burgers at fast food venues, it suggests that the segment could become an alternative channel for risky burgers.

Meanwhile, 57% of respondents who had eaten in or bought a takeaway from a fast food restaurant in the three months to May 2015 state that they are extremely or moderately concerned about the quality of meat at used at fast food restaurants7. This is likely to limit customer demand for medium or rare burgers at fast food venues.

Other elements of the gourmet burger offering such as interesting toppings and premium breads also appeal to many fast food users. That this extends well beyond the existing pool of gourmet burger bar customers shows clear potential for further expansion of such concepts. While the data suggests an opportunity for fast food chains to claim a stake in this space, until this offering becomes more widespread the gourmet burger venues should be able to capitalise on this demand.

6 “Burger and Chicken Restaurants - UK”, Mintel, August 2015. 7 “Burger and Chicken Restaurants - UK”, Mintel, August 2015.

Gourmet Burger Sector Report January 2016

FIGURE 9: FAST FOOD RESTAURANT MENU ENTICEMENTS, MAY 2015

“Which, if any, of the following would you be most interested in trying at a fast food restaurant (eg McDonald’s, Burger King etc)?"

Base: 1,292 internet users aged 16+ who have eaten in or have bought a takeaway from a fast food restaurant/outlet in the last three months

% Burgers containing thicker meat 29 Different types of meat burger (eg pork, lamb, turkey) 28 A greater selection of burger toppings (eg chorizo) 26 Burgers made using more premium bread (eg brioche bun) 24 A greater selection of dips/sauces (eg wasabi mayonnaise) 19 A greater selection of sides (eg deep fried pickles, guacamole) 19 A greater variety of fish/shellfish dishes (eg prawns in a crispy coating, Thai fishcake) 18 A greater variety of vegetarian burgers (eg Quorn burger, Portobello mushroom burger) 17 Mini chicken, beef or veggie burgers (eg sliders) 16 Ethnic-style dishes (eg falafel 'nuggets') 13 Grain-based side dishes (eg quinoa, rice pots) 13 None of these 19

SOURCE: LIGHTSPEED GMI/MINTEL

Pubs Burgers are a menu staple at pubs Apart from fast food venues, pubs pose competition to gourmet burger venues, often with similar price points, service formats and a casual dining experience. Most leading pub groups also feature burgers on their menu (see Appendix).

Some pub burgers are pitched close to fast food venues’ price points, for example Wetherspoons offers a burger and soft drink priced at £4.99 at selected London outlets. Meanwhile many pubs’ burgers stand on a par with gourmet burger venues’ offerings on price, this also being reflected in the style of product. For example, Vintage Inns offers a 7oz beef burger “in a brioche bun with smoked cheddar, sweetcure bacon, gherkin relish”. The size and toppings indicate a premium positioning.

An example of the ongoing potential that pub operators see in the market, Young’s, a leading pubco, launched the Burger Shack concept in May 2015. The outdoor ‘shack’ structures attached to its pubs serve a range of burgers priced from £7-£98. Since the original two, a further three shacks have opened, with the company understood to be looking for ten or more by July 2016.

Reports in the trade press meanwhile suggest that the Fuller’s pub chain requires all managed sites to offer burgers together with four other core dishes, suggesting that its managed portfolio of some 188 pubs can sell as many as 6,000 burgers per day. Their scale makes pubs a significant channel Pubs pose substantial competition to the gourmet burger venues and a significant potential channel for risky burgers simply through their widespread presence. The BBPA estimated the number of pubs in the UK in 2014 at 51,9009. Thanks to their generalist nature, pubs are able to trade in locations where gourmet burger specialist venues would struggle to secure a high enough footfall.

8 http://www.burgershack.co.uk/ retrieved 29th October 2015 9 http://www.beerandpub.com/statistics - 28th October 2015

Gourmet Burger Sector Report January 2016

The recession and its aftermath put pressure on the pub trade, and many operators stepped up their food offering in a bid to drive footfall and attract a wider audience.

The importance of food-led occasions is apparent in consumer research conducted for Mintel’s Pub Catering report10. Among survey respondents aged 18+, 41% reported that they visited pubs or bars at least once a month to eat in, on a par with those visiting pubs or bars for drinks. Mintel estimates that the pub catering market is worth some £7.3 billion in 2014, further underlining the scale of the channel.11

While both fast food venues and gourmet burger bars appeal more strongly to 16-34s than older cohorts, pubs attract a wider range of patrons. Visits to eat in at a pub at least once a month only dip among the over-65s. The same is apparent by income, visits at least once a month only dipping among those in households earning less than £25,000. The North /Scotland shows the highest likelihood to visit pubs to dine in at least monthly, perhaps reflecting the fact that a wider range of dining venues are available in London and the South.

The competition from pubs continues to put pressure on the gourmet burger bars to differentiate their offering from pub burgers. While their more comprehensive product range goes some way to provide this USP, there is arguably pressure on the specialists to seek out ways to set themselves apart.

FIGURE 10: VISITING A PUB TO EAT IN, AT LEAST ONCE A MONTH, BY AGE GROUP, GROSS HOUSEHOLDS INCOME AND REGION, MARCH 2015

“"Thinking about going to the pub or bar, please tell me how frequently, if at all, you normally visit a pub to EAT in?"

Base: 1,965 adults aged 18+

56 59 53 54 49 48 46 42 41 41 41 42 39 41 42 36 34 35

% 32

65+

18-24 25-34 35-44 45-54 55-64

South

London

Scotland

North West North

Under £15,500 Under

£15,500-24,999 £25,000-39,999 £40,000-49,999

Anglia/Midlands

£50,000 or moreor £50,000

Yorks/North East Yorks/North

South West/Wales South Don't know/Refused Age group Household income Region

SOURCE: IPSOS MORI/MINTEL

10 “Pub Catering – UK”, Mintel, May 2015 11 “Pub Catering – UK”, Mintel, May 2015

Gourmet Burger Sector Report January 2016

Other fast casual venues Burgers at barbecue venues Gourmet burger venues also face competition from barbecue and American style restaurants where burgers are part of the cuisine, typically featuring on the menu at similar price points. The service formats and a casual dining experience also put them in close competition with gourmet burger bars. That barbecue-style venues often position themselves as specialists in meat can mean these venues attract a customer used to meat dishes not being cooked to well-done.

For example, TGI Fridays features seven items on the burger section of its menu, which are said to be “freshly grilled to order” and priced at central London venues from £9.99 upwards. The chain was acquired by private equity firm Electra Partners in late 2014, and was described by the chain as “capable of supporting our growth ambitions” as it looks to grow share of the UK market. Category blurring is also apparent here. For example, the London-based Meat & Shake chain moved from a burger-led to a more smokehouse-based format in May 2015, reportedly to ‘differentiate itself’ in ‘a saturated burger market’. Meanwhile, Meat Liquor’s co-founder Scott Collins has described the brand as “not a burger restaurant or a barbecue place”.

Where operators adopt a more diverse offering in response to changing consumer tastes, burgers will face a challenge to defend their place on the menu, and indeed on the plate. Nonetheless, American- style and barbecue venues appear to be benefiting from the Americana trend in foodservice. Expansion by such venues should bolster the reach of gourmet-style burgers.

FIGURE 11: SELECTED BARBECUE AND AMERICAN STYLE RESTAURANT CHAINS, OUTLET NUMBERS AND EXPANSION PLANS, AUGUST 2015

Outlets UK Expansion Plans TGI Friday's 69 70th site in H1 2016. Reported openings lined up for Reading, Staines and Stevenage. Ed's Easy Diner 42 Plans to open 19 diners in the year to September 2015 and a further five by December to reach 55. Plans to reach over 100 units by September 2018. Hawksmoor 6 Red's True 5 Secured £5m of investment to fund expansion in May 2015, its focus Barbecue “remains to open 20 sites within five years." Goodman 3 The Blues Kitchen 2 Due to open a new site in Brixton, South London in in autumn 2015. Red Dog Saloon 2 Red Dog Restaurants is reportedly due to open in Soho in autumn 2015 and is in talks to open at Southampton's West Quay and in Lakeside, Essex.

SOURCE: COMPANY ACCOUNTS AND WEBSITES/TRADE PRESS/MINTEL

Burgers at mainstream venues Burgers have become a menu staple at venues outside just gourmet burger bars and pubs, even appearing at Italian restaurants like Prezzo and Bella Italia, as well as the French-style Café Rouge. The price points again suggest that the burger offering is pitched as on a par with the gourmet burger chains, Prezzo’s burger priced at £11.65 12 at the time of writing. Burger as a product relies on relatively low-cost ingredients, and the simple core product customised with toppings translates to lower skill requirements for kitchen staff as well as for speed of preparation. Combined, these make burgers an appealing proposition also for non-specialist operators.

12 http://www.prezzorestaurants.co.uk/main-menu - 29th October 2015

Gourmet Burger Sector Report January 2016

Evidencing the burger trend’s mainstream status, 14% of beef burgers eaters had eaten these from restaurants other than pubs, fast food and gourmet burger venues in the three months to October 2014 (see Beef Burger Foodservice Consumer Profile). Competition from other fast casual concepts Longer term, the ongoing development of the UK foodservice market poses all established cuisine types with the challenge of holding their ground against the latest trends. For example, following the growth of gourmet burgers, recent years have seen burrito venues gain ground in London. These match some of the strengths of burgers, such as the fast casual positioning of venues and affordable prices, as well as the high potential for customisation of the dish.

48% of respondents who had dined out in the three months to October 2015 agree with the statement “I'm always looking for new dishes to try”13, evidence of the relentless demand for newness that the market faces. The flexibility that the use of different toppings, sauces and bread types lends to burgers will go some way to allow gourmet burger bars to refresh their offering and latch onto changing trends.

Conclusions

Gourmet burger bars have from their inception focused on a positioning differentiated from fast food venues. The higher price points, table service and freshly prepared and customisable dishes contribute to this.

As such, the venues attract a different customer profile and are used for different dining occasions, meaning that the broader fast food burger market does not lend itself as a basis for projections of the performance of the gourmet burger bar market. There is some overlap in customer bases, though, and the gourmet burger bar market should benefit from consumers trading up from standard fast food outlets as real incomes grow.

As McDonald’s looks to respond to growing competition, it launched a table service pilot in 2015, including customisable burgers, and a premium range. The idea of gourmet burgers at fast food chains resonates with diners. The initiative should help to curb switching up as incomes rise to outlets serving risky burgers and prompt higher spend at fast food outlets instead, if rolled out.

The picture of potential channels of distribution of risky channels is complicated by the number of other foodservice businesses that serve thicker burgers that could pose a food safety risk if served rare. Crucially, the main selling points of gourmet burger bars (customisation, thicker patties, a wider range of toppings) have mainstream appeal well beyond the current gourmet burger users.

Most leading pub groups feature burgers on their menu often with similar price points to gourmet burger bars. Pubs’ widespread presence, able to trade in locations where specialists would struggle, means they pose substantial competition to gourmet burger venues and a significant potential channel for thicker burgers. Depending on their cooking policies this could, in turn, translate into greater sales of risky burgers.

Gourmet-style burgers have now also become a menu staple at a wide variety of restaurants, even Italian-style venues. They are also part of the cuisine at barbecue and American style restaurants. While this means thicker burgers are currently widespread, burgers at such venues are under a constant challenge to defend their place on the menu as operators response to changing consumer tastes.

13 “Menu Flavours – UK”. Mintel, February 2016. Data from upcoming report

Gourmet Burger Sector Report January 2016

Gourmet Burger Bars - Customer Profile

Introduction In this section we discuss the public’s current usage of gourmet burger restaurants, in terms of:

1) overall usage of gourmet burger venues compared to other chicken and burger restaurants; and

2) the demographic groups that stand out as the most likely users.

The data in this section draws from consumer research conducted for “Burger and Chicken Restaurants”, Mintel, August 2015, commissioned by Mintel. Research was carried out by Lightspeed GMI among 2,000 internet users aged 16+ in May 2015. Details of the survey and demographic breakdowns are provided in the appendix.

Overall usage of gourmet burger bars Among all survey respondents, the majority (65%) of participants stated that they had eaten in or bought a takeaway from a fast food outlet /restaurant in the three months to May 2015. Around half (51%) of participants had visited a burger restaurant. However, only 5% had visited a gourmet burger bar, such as Gourmet Burger Kitchen or Haché.

The high overall usage of burger bars reflects the large fast food chains’ affordability compared to other dining out sectors, their long-established presence in the UK and the extensive national coverage of their store estates. For example, McDonald’s and KFC together had some 1,749 outlets in total as at July 2015.

By comparison, gourmet burger bars’ low penetration is a function of the limited store estates, discussed in the Competitive landscape section, and their higher price points. The latter is reflected in usage being skewed towards higher income households, as discussed below.

There is still considerable scope for expansion in the market. Even a relatively small shift from mainstream fast food outlets to gourmet burger bars would lead to a sizeable expansion in the customer base.

FIGURE 12: FAST FOOD OUTLET/RESTAURANT USAGE, MAY 2015

"Which, if any, of the following fast food outlets/restaurants have you eaten in or bought a takeaway from in the last 3 months?"

Base: 2,000 internet users aged 16+ All %

Any fast food restaurant 65 Any burger restaurant 51 Any chicken restaurant 37 McDonald's 43 KFC 28 Subway 22 Burger King 17 Nando's 13 Gourmet burger bar (eg Gourmet Burger Kitchen, 5 Haché) Rotisserie chicken restaurant (eg Chicken Shop) 2

Gourmet Burger Sector Report January 2016

Other chicken outlet (eg Southern Fried Chicken, 7 Chicken Cottage, Favourite Fried Chicken) Other burger outlet (eg Wimpy) 3 I have not eaten in or bought a takeaway from fast food 35 outlets/restaurants in the last 3 months

SOURCE: LIGHTSPEED GMI/MINTEL

Key demographic groups of gourmet burger bar users Age Usage of gourmet burger bars shows no significant difference by gender, in line with overall burger restaurant usage. Similarly in line with the latter, younger cohorts are more likely than older consumers to state that they have visited gourmet burger bars in the three months to May 2015. While 10% of 16-34-year-olds report having visited these venues, this falls to just 2% among over-45s.

That usage falls sharply among the older cohorts is reflexive of their generally dining out less often than the younger age groups14.

They are also more likely to cite special occasions as one of their main reasons for dining out. 54% of over-45s reference these compared to 41% of 16-34s15, this focus also likely to dampen the appeal of casual venues like gourmet burger bars.

In light of this, the 4% growth in the number of 15-34 year-olds over 2010-15 should have helped to fuel growth in the market. That no further growth is predicted in this age group over the 2015- 20 period therefore suggests the absence of a previous growth driver.

However, the scale of impact will depend in part on the ability of the market to retain current users as they age. While it seems unlikely that established users would trade down to fast food burger venues as they age, they may trade up to less casual formats. The overall fall in dining out frequency with age is also likely to see fewer visits to gourmet burger bars, among other venues.

FIGURE 13: BURGER RESTAURANT USAGE AND GOURMET BURGER BAR USAGE, BY AGE GROUP, MAY 2015

"Which, if any, of the following fast food outlets/restaurants have you eaten in or bought a takeaway from in the last 3 months?"

Base: 2,000 internet users aged 16+

14 “Menu Flavours - UK”. Mintel, February 2015 15 “Eating Out Review - UK”. Mintel, June 2014

Gourmet Burger Sector Report January 2016

67 65 53 49

% 31

10 11 5 2 2

16-24 25-34 35-44 45-54 55+ Any burger restaurant Gourmet burger bar

SOURCE: LIGHTSPEED GMI/MINTEL Income Household income is a key predictor of gourmet burger bar usage in the three months to May 2015. While only 4% of respondents in households with a gross annual household income of less than £50,000 report having visited these venues, this rises to 12% among higher income households. This in contrast to burger bars as a whole, which enjoy consistent penetration among all households earning more than £15,500. That usage of gourmet burger bars rises sharply among wealthier households, while that of burger bars overall does not, indicates that the noticeably higher prices of the former are a barrier to consumers. For example, the leading chain, Gourmet Burger Kitchen prices its standard sized burgers from £6.85 upwards16 and Byron from £6.75 upwards17. By comparison, McDonald’s long-standing ‘saver menu’ features burgers starting at £0.99.

Related to usage rising with incomes, gourmet burger bar usage is also higher among the AB socio-economic group (at 9%) than C1C2s (6%) or DEs (2%). Similarly, respondents who describe their financial situation as ‘healthy’ or ‘OK’ are more likely (6.2%) to use gourmet burger bars than those who see their financial situation as ‘tight’ or worse (3.5%).

This usage pattern suggests that the expected rise in real household incomes over the next five years should fuel growth in user numbers at gourmet burger bars. While it is also likely to some extent facilitate trading up from gourmet burger bars by current users, in light of the decidedly low current levels of usage, on balance, the market is likely to gain users.

FIGURE 14: BURGER RESTAURANT USAGE AND GOURMET BURGER BAR USAGE, BY GROSS HOUSEHOLD ANNUAL INCOME, MAY 2015

"Which, if any, of the following fast food outlets/restaurants have you eaten in or bought a takeaway from in the last 3 months?"

16 http://www.gbk.co.uk – retrieved 23rd October 2015. 17 https://www.byronhamburgers.com – retrieved 23rd October 2015.

Gourmet Burger Sector Report January 2016

Base: 2,000 internet users aged 16+

54 53 56 45 43

% 12 7 3 4 5

Under £15,500 £15,500-24,999 £25,000-49,999 £50,000 or over Don't know/ Rather not say

Any burger restaurant Gourmet burger bar

SOURCE: LIGHTSPEED GMI/MINTEL

Location Respondents in London are more likely than those in many other regions to state that they have visited gourmet burger bars in the three months to May 2015. Usage is also higher among those living in an urban location (8%) than those in a suburban (4%) or village/rural locations (3%).

This is in line with Londoners and urban dwellers standing out similarly in terms of frequency of dining, which partly reflects the younger demographic profile of both18. However, it is also indicative of the geographical coverage of gourmet burger bars. As discussed in the Competitive landscape section, The Gourmet Burger Kitchen and Byron are the only leading chains with a well- established presence outside London. However, even then their focus remains firmly in major urban centres.

That consumers’ limited access to gourmet burger bars poses a barrier to usage suggests that the expected further outlet expansion of many of the brands should continue to drive up penetration. However, this depends in part on brands continuing to target new areas, as opposed to new brands entering the high-potential locations already serviced by their competitors.

18 “Menu Flavours”. Mintel, February 2015

Gourmet Burger Sector Report January 2016

FIGURE 15: GOURMET BURGER BAR USAGE, BY REGION, MAY 2015

Base: 2,000 internet users aged 16+

Scotland 5 North East/North West 4 Yorkshire & Humberside 6 East Midlands 5 West Midlands 6 Inner & Greater London 9 South East/East Anglia 5 South West/Wales 4

% SOURCE: LIGHTSPEED GMI/MINTEL Conclusions Current penetration of gourmet burger bars is decidedly low, at just 5% of population. 16-34-year- olds, higher income households and ABs, and Londoners and urbanites come across as the most likely users.

Although the chains are positioned as an affordable option in the overall dining out market, their price points appear to nonetheless curb usage, in light of the user profile. As such, the predicted rise in real disposable incomes going forward should on balance bring more users to the market.

The user profile also points to the limited geographical presence of gourmet burger bars as a barrier to usage, suggesting the chains’ planned expansion should fuel a rise in penetration. The predicted lack of growth in the 16-34 age group meanwhile will see a previous growth driver lacking over the 2015-20 period. Apart from these factors, as discussed in the section Competing and Alternative Channels, the dining experience at most gourmet burger bars is more closely on a par with a traditional restaurant meal than a fast food meal. While this makes them better able to target leisure occasions, it lends itself less readily to convenience-led or time-pressed occasions. Gourmet burger bars however share the ‘casual’ image of fast food outlets, reflected in the young user profile.

Gourmet Burger Sector Report January 2016

Beef Burger Foodservice Consumer Profile

Introduction In this section we discuss the public’s current consumption of beef burgers at foodservice venues, in terms of:

1) beef burger uptake in the foodservice channel and demographic profile of users;

2) the foodservice channels used to buy beef burgers from;

3) the cooking preference for a ‘perfect’ beef burger and the reasons for those preferences;

4) penetration of medium or medium rare beef burgers and the demographic profile of users.

The data in this section draws from consumer research commissioned by Mintel. Research was carried out by Lightspeed GMI among internet users aged 16+ in October-November 2015.

The survey was completed by 2,000 respondents, of who 915 had eaten a beef burger from a restaurant, fast food venue/van, pub or takeaway in the last 3 months.

The questions on venues from which diners have eaten beef burgers, preferred cooking level of a beef burger, and whether they had eaten medium or rare beef burgers from foodservice venues in the last two weeks were only put to people who had eaten burgers in the last three months. Based on how the survey respondents reported preferring to have their ‘perfect’ beef burger cooked, they were then asked to type in a response as to why they prefer this level of cooking, to gauge the drivers behind their choice. The open-ended responses were grouped by theme. Details of the survey and demographic breakdowns are provided in the appendix.

Uptake of beef burgers in foodservice Among all survey respondents, 46% of participants stated that they had eaten a beef burger from a restaurant, fast food venue/van, pub or takeaway in the three months to October 2015. This compares to 90% of consumers having eaten out or ordered a takeaway/home delivery from any foodservice venue in the three months to October 201519.

That around half of diners are eating beef burgers in the foodservice industry is evidence of the mainstream popularity of the dish, and the role it has established as a menu staple. This has been facilitated by beef burgers being adopted on the menu across a wide range of venues and price points from fast food chains to high-end restaurants. The relatively low cost of ingredients and ease of preparation translate to strong margins even at affordable prices, bolstering its appeal for operators.

19 “Menu Flavours – UK”. Mintel, February 2016. Data from upcoming report

Gourmet Burger Sector Report January 2016

Uptake in foodservice - demographics Uptake of beef burgers rises to 57% among 16-34s. It also stands above average among residents of Inner & Greater London (60%) and among urban dwellers (53%). Respondents in households earning £50,000 or more and A socio-economic group also report higher than average uptake at 59% and 58% respectively. These patterns are in line with the above groups having the highest frequency of dining out generally20.

Uptake is also considerably higher among parents of children aged 12 or under (65%) than those with older children, or none in the household. This appears to stem in part from the high use of burger fast food outlets by these groups, likely to appeal thanks to their family-friendly and affordable positioning.

FIGURE 16: BEEF BURGER UPTAKE AT FOODSERVICE VENUES IN THE PAST THREE MONTHS, BY SELECTED DEMOGRAPHICS, OCTOBER 2015

"Have you eaten a beef burger from a restaurant, fast food venue/van, pub or takeaway in the last 3 months?"

Base: 2,000 internet users aged 16+

Sample % who have size eaten burgers at a foodservice venue

Total 2,000 46

Gender Male 997 50 Female 1,003 42

Age 16-34 707 57 35-44 368 52 45-64 658 41 65+ 267 19

Region Scotland 171 37 North East 84* 42 North West 228 47 Yorkshire & Humberside 171 41 East Midlands 148 43 West Midlands 182 51 Inner & Greater London 270 60 South East/East Anglia 474 44 South West 173 39 Wales 99* 42

Location Urban location (ie living in a town/city) 783 53 Suburban location (ie close to town/city but 826 42 living outside a town/city) Village/rural location 391 38

Socio-economic group

20 “Menu Flavours – UK”. Mintel, February 2016. Data from upcoming report

Gourmet Burger Sector Report January 2016

A 111 59 B 335 45 C1 618 46 C2 418 50 D 264 47 E 254 33

Gross annual household income Under £15,500 490 40 £15,500 - 24,999 399 46 £25,000 - 49,999 648 48 £50,000 or over 259 58 Don't know/Rather not say 204 37

Children living in the household Aged 5 and under 200 66 Aged 6-12 278 65 Aged 13-17 292 55 Aged 13-15 182 59 Aged 16-17 167 51 Aged 18+ 261 45 I am not the parent/guardian of any children 1,249 40 in my household

* Small sub-sample (75-100) SOURCE: LIGHTSPEED GMI/MINTEL

Beef burgers - venues Fast food outlets are by far the most common venues for eating beef burgers. Among survey respondents who had eaten beef burgers in the three months to October 2015, 71% stated that they had eaten a beef burger from a fast food venue. The fast food venues’ low prices and extensive geographical presence contribute to their large customer base. The role of fast food venues as competition to gourmet burger bars is discussed in more detail in the section Competing and Alternative Channels.

27% and 18% of beef burger eaters had eaten these from pubs and gourmet burger outlets respectively. These venues have been identified as potential channels for risky burgers, as discussed in the sections Competing and Alternative Channels and Gourmet Burger Competitive Landscape. Evidencing the burger trend’s mainstream status, 14% of beef burgers eaters had eaten these from other restaurants. Venues – demographics

Beef burger eaters aged 26-35s are more likely to have eaten these at a pub than those aged 36 or over. This is in line with under-35s generally visiting pubs more frequently to eat in than the over- 35s.21 However, age is the only demographic attribute where a specific group stands out for higher than average for beef burger usage at pubs.

Meanwhile, gourmet burger bars attract higher usage among beef burger eaters in the AB socio- economic group than others, and among those in households earning £50,000 or more. This is in line with the venues’ overall user profile, and is a reflection of their relatively high price points as well as of these groups’ higher than average frequency of dining out.

21 “Menu Flavours – UK”. Mintel, February 2016. Data from upcoming report.

Gourmet Burger Sector Report January 2016

FIGURE 17: VENUES FROM WHICH DINERS HAVE EATEN BEEF BURGERS IN THE PAST THREE MONTHS, OCTOBER 2015

"From which of the following venues have you eaten beef burgers in the last 3 months?"

Base: 915 internet users 16+ who have eaten a beef burger from a restaurant, fast food venue/van, pub or takeaway in the last 3 months

Fast food outlet (eg McDonald's, Burger King, 71 kebab shop)

Pub 27

Gourmet burger outlet (eg GBK, Byron) 18

Other restaurant (eg Bella Italia, Café Rouge) 14

Street food van (eg burger van) 13

Other foodservice venue 4

SOURCE: LIGHTSPEED GMI/MINTEL

Beef burgers – preferred cooking level Beef burgers are most widely preferred well-done by survey respondents who had eaten beef burgers in the three months to October 2015. 59% stated this was their preferred style, which should make the burgers risk-free in the framework of this FSA consideration -.

27% stated medium and 12% cited medium-rare or rare burgers as their preference, signalling a significant pool of demand for potentially risky burgers. Preferred cooking level - demographics Under-45s, ABC1s and respondents with a gross household income of £50,000 or more showed the strongest preference for medium or rare burgers, among respondents who had eaten beef burgers in the three months to October 2015.

The over-45s are more likely than younger cohorts to state they are ‘extremely concerned’ about the presence of harmful bacteria in food/drink (eg E. coli, campylobacter, salmonella)22, such concerns being likely to drive their preference for fully-cooked burgers.

Meanwhile, the under-45s, ABs and top income households are the most likely to agree with the statement “I consider myself a "foodie"”, among respondents who had dined out or ordered a takeaway/home delivery in the three months to October 201523.

FIGURE 18: PREFERRED COOKING LEVEL OF A BEEF BURGER, OCTOBER 2015

"Thinking about your perfect beef burger, how would you prefer to have it cooked?"

22 “Consumers' Food Safety Concerns – UK”. Mintel, May 2015 23 “Menu Flavours – UK”. Mintel, February 2016. Data from upcoming report.

Gourmet Burger Sector Report January 2016

Base: 915 internet users 16+ who have eaten a beef burger from a restaurant, fast food venue/van, pub or takeaway in the last 3 months

2 3 1 1 3 2 4 2 3 1 4 3 0 6 2 7 8 12 13 11 15 11 16 12 16 11 19 No preference 24 24 24 25 23 27 29 28 29 29 29 34 Medium-rare/rare (pink/red in the middle) % 82 Medium (possible pink streaks inside) 68 66 67 59 63 61 58 56 54 52 53 47 Well-done (cooked

through)

65+

Male

Total

16-34 35-44 45-64

ABC1

C2DE

Female

Under £15,500 Under

£50,000 or over or £50,000

£15,500-24,999 £25,000-49,999 Gender Age Soc-econ Gross household group income

SOURCE: LIGHTSPEED GMI/MINTEL

Medium/rare beef burger consumption in foodservice 26% of survey respondents who had eaten beef burgers in the three months to October 2015 state having eaten a medium or rare burger in the last two weeks. This equates to 12% of all survey respondents. Groups most likely to report doing so include 16-34-year-olds, ABC1s, urban dwellers, and those who describe their financial situation as healthy.

The former two groups are also the most likely to state that they prefer beef burgers rare, suggesting this demand is at play. However, for the other two groups, their higher than average overall frequency of dining out24 appears to be a key driver. Simply being more likely to dine out at least once a fortnight contributes to their being more likely to have eaten burgers in the last two weeks, including medium or rare ones.

FIGURE 19: EATING MEDIUM OR RARE BEEF BURGERS FROM FOODSERVICE VENUES IN THE LAST TWO WEEKS, BY AGE GROUP, LOCATION, SOCIO-ECONOMIC GROUP AND FINANCIAL SITUATION, OCTOBER 2015 “Have you eaten a medium or rare beef burger from a restaurant, fast food venue/van, pub or takeaway in the last 2 weeks?”

Base: 915 internet users 16+ who have eaten a beef burger from a restaurant, fast food venue/van, pub or takeaway in the last 3 months

24 “Menu Flavours – UK”. Mintel, February 2016. Data from upcoming report.

Gourmet Burger Sector Report January 2016

35 35 32 30 26 26 24 24 21 23 18 % 17 14

65+

Tight

16-34 35-44 45-64

ABC1

C2DE

Urban

Healthy

Suburban

Struggling* Village/rural All Age Location Soc-econ Financial situation group

* Small sub-sample (75-100)

SOURCE: LIGHTSPEED GMI/MINTEL

Reasons for preferred cooking level Methodology

Based on how the survey respondents reported preferring to have their ‘perfect’ beef burger cooked, they were then asked to type in a response as to why they prefer this level of cooking, to gauge the drivers behind their choice. The open-ended responses were grouped by theme, and the results are as follows.

Readers should note that the reasons for preferences were asked with regards to well-done, medium and medium-rare burgers separately. The sample for well-done burgers is therefore 542 internet users 16+ who have eaten a beef burger from a restaurant, fast food venue/van, pub or takeaway in the last 3 months and prefer beef burgers well-done. The sample for medium burgers was 246 respondents and for medium-rare burger 95 respondents.

Readers should also note the implication of the relatively small sample sizes for the margin of error. For example, for a sample of 500, the margin of error for a question with a 15% level of agreement is ±3.2%. For a sample of 250, it’s ±4.5% and for a sample of 100 it’s ±7.1%.

Well-done burgers

Safety plays a key role in the respondents’ preference for well-done beef burgers. However, taste and texture are key drivers, including disliking the juices that many associate with medium or rare burgers.

Many also made references to ‘knowing it’s cooked’ or being put off by pink or uncooked meat. While these imply that safety is likely to be a consideration, where the reason for these preferences was not made explicit, the responses are grouped separately.

Gourmet Burger Sector Report January 2016

Where no further explanation was given beyond ‘it’s my personal preference’, and equivalents thereof, these responses were grouped separately, as such preferences could be driven by any of the above considerations.

That so many respondents failed to articulate the underlying reason behind their preference – whether liking burgers to be cooked, being put off by those that are not, or just referencing ‘liking’ – seems to suggest that a limited knowledge of the related food safety issues, and a reliance on established habits.

FIGURE 20: REASONS FOR PREFERRING A WELL-DONE BEEF BURGER, OCTOBER 2015 “Why do you prefer a well-done burger?” (open-ended question)

Base: 542 internet users 16+ who have eaten a beef burger from a restaurant, fast food venue/van, pub or takeaway in the last 3 months and prefer beef burgers well-done

Safety 26 Taste 20 Prefer cooked 14 Dislike raw/pink 13 Dislike 'blood' 9 Personal preference 8 Texture 3 Health 3 Other 4 Don't know 2 %

SOURCE: LIGHTSPEED GMI/MINTEL

Medium burgers

The preference for medium burgers is overwhelmingly fuelled by the eating experience being seen as better in terms of taste, texture and juiciness. A small share of respondents also identify medium burgers as a safe choice, or are put off by rare burgers, suggesting that there may be lack of awareness of the risks associated.

That demand for medium beef burgers among people who eat beef burgers stems from positive taste perceptions suggests that this positive view will be sustained. Thus, the demand for medium burgers is unlikely to be a fad, dependent on for example the burger venues promoting it.

FIGURE 21: REASONS FOR PREFERRING A MEDIUM BEEF BURGER, OCTOBER 2015 “Why do you prefer a medium burger?” (open-ended question)

Gourmet Burger Sector Report January 2016

Base: 246 internet users 16+ who have eaten a beef burger from a restaurant, fast food venue/van, pub or takeaway in the last 3 months and prefer beef burgers medium

Taste 42 Seen as juicy 16 Personal preference 13 Texture 11 Dislike 'overcooked' 6 Dislike rare 4 Safety 3 Other 5 Don't know 1 %

SOURCE: LIGHTSPEED GMI/MINTEL Medium-rare burgers

The same pattern is apparent for medium-rare as medium burgers, of the eating experience fuelling demand, suggesting that this interest is unlikely to wane simply with food fashions.

FIGURE 22: REASONS FOR PREFERRING A MEDIUM-RARE BEEF BURGER, OCTOBER 2015 “Why do you prefer a medium burger?” (open-ended question)

Base: 95 internet users 16+ who have eaten a beef burger from a restaurant, fast food venue/van, pub or takeaway in the last 3 months and prefer beef burgers medium-rare

Taste 54

Seen as juicy 15

Texture 14

Personal preference 11

Other 2 %

SOURCE: LIGHTSPEED GMI/MINTEL Conclusions That around half of diners are eating beef burgers in the foodservice is evidence of the role it has established as a menu staple across a wide range of venues. The strong margins at affordable prices bolster its appeal for foodservice operators.

Fast food outlets are by far the most common venues for eating beef burgers. Venues identified as potential channels for risky burgers, pubs and gourmet burger bars, attract visits from 27% and 18% of beef burger eaters respectively.

Gourmet Burger Sector Report January 2016

59% of eaters prefer beef burgers well-done. 27% prefer medium and 12% medium-rare or rare burgers, signalling a significant pool of demand for potentially risky burgers. Preference for these is highest among demographic groups that dine out most often and that are the most likely to identify themselves as ‘foodies’. Current users’ preference for medium or rare burgers is overwhelmingly fuelled by these being seen to offer a superior eating experience in terms of taste, texture and juiciness. Given that this is a view held by current burger eaters, it is likely be sustained. Therefore the demand for such cooking levels for burgers are unlikely to be just a fad, although the demand for burgers on the whole may wane. 26% of survey respondents who had eaten beef burgers in the three months to October 2015 state having eaten a medium or rare burger in the last two weeks. Groups most likely to report doing so include 16-34-year-olds, ABC1s, urban dwellers, and those who describe their financial situation as healthy.

Market Drivers

Introduction In this section we discuss the various external trends affecting the gourmet burger bar market, including the effects of the improving household incomes, changes to the age structure of the population, and consumer trends on the market.

The data in this section draws from research conducted by Mintel for various foodservice and other reports, as detailed below, as well as additional research including review of leading foodservice trade press.

Rising incomes bode well for gourmet burger venues

Household income of more than £50,000 is a key predictor of higher gourmet burger bar usage, as discussed in the Consumer Profile section. Similarly, respondents who describe their financial situation as ‘healthy’ or ‘OK’ are more likely to use gourmet burger bars than those who see their financial situation as ‘tight’ or worse. This indicates that the relatively high prices are a barrier to consumers. The expected rise in real household incomes over the next five years should fuel growth in user numbers at gourmet burger bars. While it is also likely to some extent facilitate trading up from these venues by current users, in light of the low current levels of usage, on balance, the market is likely to gain users.

FIGURE 23: AVERAGE WEEKLY EARNINGS AND RPI, YEAR-ON-YEAR % CHANGE, JANUARY 2007-AUGUST 2015

Gourmet Burger Sector Report January 2016

8 year

- 6

RPI on

- 4 2 0 Wage growth -2 (incl. -4 bonuses)

-6 % year % change,

-8

Jul 13 Jul Jul07 Jul08 Jul09 Jul10 Jul11 Jul12 Jul14 Jul15

Jan 10 Jan Jan 07 Jan 08 Jan 09 Jan 11 Jan 12 Jan 13 Jan 14 Jan 15 Jan

SOURCE: OFFICE FOR NATIONAL STATISTICS/MINTEL

GBK enjoys a stronger aspirational image than fast food chains

Brand research methodology

Mintel regularly conducts research into consumer attitudes towards brands, published in the Brand Research sections of category reports. A selection of leading brands is featured in each product category. Brands are evaluated on a number of areas including usage, commitment, dynamism, differentiation, satisfaction, image, recommendation and attitudes. The research is typically conducted among a nationally representative sample of some 2,000 internet users aged 16+.

The below table features a selection of brand image attributes in relation to the leading fast food burger chains, McDonald’s and Burger King, and the leading gourmet burger chain by store number, the Gourmet Burger Kitchen. Attitudes towards each were surveyed among internet users aged 16+ who reported having heard of the brand and expressed an opinion.

GBK enjoys stronger premium associations

Comparing the attitudes of the respondents to the leading fast food burger brands and the leading gourmet burger bar further underlines the fact that these are seen in a very different light. The former for example stand out for their strong association with convenience and family. The latter meanwhile enjoys stronger associations with qualities like cool, authentic and special.

The differences in image further suggest that the formats are not currently seen by consumers as fulfilling the same function, and therefore, as interchangeable, as discussed in section Competing and Alternative Channels. The performance of the fast food burger market therefore does not lend itself as a basis for projections of the gourmet burger bar market.

Gourmet Burger Sector Report January 2016

The stronger associations of GBK with positive premium attributes like cool, authentic and special and weaker associations with negative traits like tacky or samey, further suggest that it has a stronger aspirational image than the fast food burger brands. As such, it should benefit from trading up as consumer spending regains momentum.

FIGURE 24: BRAND IMAGE – MICRO IMAGE, MCDONALD’S, BURGER KING AND GBK, JUNE 2015

"Now, from the list below, please select all words that describe your image of each brand" McDonald's Burger King Gourmet Burger Kitchen Base: internet users aged 16+ who have heard of a brand and expressed 1,979 1,958 1,053 an opinion % % % Exciting 11 8 14 Welcoming 27 20 22 Cool 12 9 20 Authentic 12 12 24 Convenient 44 33 9 Efficient 21 14 12 Family 42 30 17 Friendly 31 22 21 Healthy 4 3 11 Traditional 15 13 9 Responsive 9 6 7 Special 8 7 24 Samey 16 18 4 Impersonal 13 11 5 Tacky 19 15 3 None of these 9 17 27

Data from “Burger and Chicken Restaurants”, Mintel, August 2015

SOURCE: LIGHTSPEED GMI/MINTEL

Lack of growth among 15-34s Younger cohorts are more likely than older consumers to state that they have visited gourmet burger bars in the three months to May 2015, as discussed in the Consumer Profile section. In light of this, the 4% growth in the number of 15-34 year-olds over 2010-15 should have helped to fuel growth in the market. That no further growth is predicted in this age group over the 2015-20 period suggests the absence of a previous growth driver, which stands to dampen growth compared to the previous period.

Gourmet Burger Sector Report January 2016

The ability of the market to retain current users as they age will affect the scale of impact. While it seems unlikely that established users would trade down to fast food burger venues as they age, they may trade up to less casual formats or to other cuisine types with improving finances. The overall fall in dining out frequency with age is also likely to see fewer visits to gourmet burger bars from the current core users as they age, as well as to other venues.

If the current 16-34-year-olds retain their gourmet burger bar usage as they reach the family lifestage, this could see future cohorts grow up with the gourmet burger rather than fast food burger established as the benchmark in this market.

FIGURE 25: TRENDS IN THE AGE STRUCTURE OF THE UK POPULATION, 2010-20

11.65 12.67 10.30 65+ 8.20 7.34 7.34 55-64 8.55 9.12 8.73 45-54 8.83 8.14 8.37 35-44

million 8.14 9.09 9.45 25-34 8.22 7.93 7.54 15-24 0-14 10.87 11.50 12.23

2010 2015 (proj) 2020 (proj)

SOURCE: ONS/MINTEL

Gourmet burgers widely seen as healthier than fast food Consumer research conducted for “Burger and Chicken Restaurants”, Mintel, August 2015, found that among survey respondents who had eaten in or bought a takeaway from a fast food restaurant in the three months to May 2015, 39% agreed that gourmet burgers (eg from Gourmet Burger Kitchen) are better for you than burgers from a fast food restaurant.

Only 24% of internet users aged 16+ were reported to “eat what I like and don’t worry too much about healthy my diet is” in Mintel’s exclusive consumer research at August 2015. That so few respondents pay no heed to the healthiness of their food choices suggests that such issues matter for most. The perception of gourmet burgers as the healthier choice should therefore bode well for the gourmet burger segment.

The interest in healthiness is a long-established trend and the issue in its various guises is expected to remain on the consumer radar also going forward.

FIGURE 26: AGREEMENT WITH THE STATEMENT “I EAT WHAT I LIKE AND DON'T WORRY TOO MUCH ABOUT HOW HEALTHY MY DIET IS”, MARCH 2012-AUGUST 2015

Base: 1,500-2,000 internet users aged 16+

Gourmet Burger Sector Report January 2016

% 15

Jul-12 Jul-13 Jul-14 Jul-15

Jan-13 Jan-14 Jan-15

Mar-12 Mar-13 Mar-14 Mar-15

Nov-12 Nov-13 Nov-14

Sep-13 Sep-12 Sep-14

May-13 May-14 May-15 May-12 SOURCE: LIGHTSPEED GMI/MINTEL

Diners look for indulgence on special occasions

In the consumer survey for Mintel’s Eating Out: The Decision Making Process, July 2014, respondents who dine out were asked what type of dining experience they typically look for on special occasions. These factors are likely to gain importance in consumers’ foodservice choices as real incomes rise.

The most widely sought attributes included indulgent (43% of respondents), relaxed (38%), and fun (31%). Out of the ordinary and adventurous stood further down the list, cited by 25% and 16% of respondents respectively.

The demand for indulgence is something gourmet burgers should be well-placed to capitalise on. FIGURE 27: CONSUMER EXPECTATIONS OF DINING OUT OCCASIONS, APRIL 2014 “Thinking about eating out for a special occasion (eg birthday), which of the following words would best describe the type of dining experience that you typically look for? Please select all that apply.” Base: 1,683 internet users aged 16+ who have eaten in a restaurant or fast food outlet in the past three months

Indulgent 43 Relaxed 38 Fun 31 Out of the ordinary 25 Exclusive 20 Adventurous 16 Traditional 14 Convenient 13 Familiar 13 Trendy 12 Formal 11 Healthy 8 Cheap 5 Quick 3 None of these 4 %

Gourmet Burger Sector Report January 2016

Data from “Eating Out: The Decision Making Process”, Mintel, July 2014

SOURCE: LIGHTSPEED GMI/MINTEL

Three in ten think restaurants should have the option to cook burgers rare Consumer research conducted for “Burger and Chicken Restaurants”, Mintel, August 2015, found that among survey respondents who had eaten in or bought a takeaway from a fast food restaurant in the three months to May 2015, 30% agreed that burger restaurants should have the option to cook beef burgers rare.

Agreement peaks among fast food diners aged 16-34 and increases with household income, matching the profile of most frequent diners and the profile of gourmet burger bar users.

Agreement is likely to be as much about a belief in freedom of choice as it is about a personal preference for rare burgers, but the level of agreement highlights the political/public opinion challenges associated with any attempt to mandate that burgers are served well-done.

That a third of respondents actively disagree with the statement, however, suggests that many have reservations about burgers that are served rare. Steps to ensure that diners are informed about their choices at the restaurant should resonate among this group.

The high-margin, quick turnaround dish appeals to operators Across the UK foodservice market, property prices are a significant factor for operators, with competition pushing rents up in key locations, also discussed in the section Gourmet Burger Bar Market Characteristics. This has to some extent played in favour of fast casual formats like burger restaurants, which allow for quick turnaround on the tables. Burger as a product relies on relatively low-cost ingredients, and the simple core product customised with toppings translates to lower skill requirements for kitchen staff as well as for speed of preparation. Combined, these make burgers cheap to produce compared to many cuisines or dish types, translating to high margins and making this an appealing proposition for the operators.

The ease of preparation and low skill requirements have also facilitated the uptake of gourmet-style burgers by a wide array of non-specialist venues, creating a wider range of distribution channels for potential risky burgers.

Changing foodservice trends The fast pace of development of the UK foodservice market poses all established cuisine types with the challenge of holding their ground against the latest trends. The same is true of gourmet burgers. 48% of respondents who had dined out in the three months to October 2015 agree with the statement “I'm always looking for new dishes to try”25, providing evidence of the relentless demand for newness.

25 “Menu Flavours – UK”. Mintel, February 2016. Data from upcoming report

Gourmet Burger Sector Report January 2016

The flexibility that the use of different toppings, sauces and bread types lends to burgers will go some way to allow gourmet burger bars to refresh their offering and latch onto new flavour trends. This has its limitations, with food trends consisting of much more than just flavour trends, with for example burrito bars gaining prevalence in recent years. There also remains marked untapped interest in ethnic cuisines among UK diners26.

Comparison to the US market Mintel’s US research shows that there are a number of parallels between the UK and the US beef burger market. However, the US market provides limited learnings for the UK in terms of future developments.

Customisation of burgers is identified as a new trend within the US foodservice industry, but is already established in the UK. The US foodservice market has seen a growing number of casual dining establishments adopt customisation, a trend which is also apparent in the UK in McDonald’s latest initiatives as well as in other foodservice segments such as burrito bars. This aspect is helping other operators compete with the gourmet burger market.

The US analysis suggests that “chef first” restaurants have adopted a default temperature of serving beef burgers medium or even medium-rare. These restaurants position the chef as the leader of the meal rather than the customer dictating the meal, the serving temperature chosen because the chef believes that is the “correct” temperature at which to eat the burger.

This is again an approach seen in the UK already, as discussed in the Gourmet Burger Bar Market Characteristics section, though venues here will typically temper the recommendation by stating that they will cook burgers to customer preference.

Conclusions

Higher household income and a secure financial situation are key predictors of gourmet burger bar use. The expected rise in real household incomes over the next five years will facilitate trading up from gourmet burger specialists by some current users, but on balance, the market is likely to gain users.

Younger cohorts are more likely than older consumers to have visited gourmet burger bars. The 4% growth in 15-34 year-olds over 2010-15 should have benefited the market, but no further growth is predicted in this age group over 2015-20. While established users are unlikely to trade down to fast food burger venues as they age, they may trade up to less casual formats.

Gourmet burgers are widely seen as better for you than burgers from a fast food restaurant. The interest in healthiness is a long-established trend and expected to endure. The perception of gourmet burgers as the healthier choice – if retained - should therefore bode well for the gourmet burger segment.

Opinions are divided on whether burger restaurants should have the option to cook beef burgers rare, continuing to highlight the thorny issue, and the importance of customer buy-in to address the potential risk posed by beef burgers.

26 “Ethnic Restaurants and Takeaways – UK.” Mintel, February 2015

Gourmet Burger Sector Report January 2016

Conclusions Gourmet burger bar market remains small and fragmented Gourmet burgers are not synonymous with burgers not being fully cooked. However, the typically thicker beef patties and the ‘connoisseur’ positioning of many gourmet burger venues have led to many of the identified operators serving their burgers as pink or ‘medium’ as standard.

Gourmet burger bars are a recent phenomenon in the UK foodservice market. While the market is growing rapidly, it remains a small and fragmented one, only two operators reporting more than 50 outlets. The combined turnover of the only five chains large enough to be required to report their this comes to some £150 million. This compares to sales of £3.0 billion in the overall burger bar market.

Various established brands and numerous large US entrants have announced ambitious expansion plans. Where the operators are moving beyond their current, largely metropolitan, base, this will bring new consumers to the market. However, many operators are currently targeting the same key cities, the overlap dampening the growth of the market as a whole.

Various venues serve thicker burgers

Gourmet burger bars have from their inception focused on a positioning differentiated from fast food venues. While the latter is at risk of consumers trading up as real incomes grow, the former is likely to benefit. However, the idea of gourmet burgers at fast food chains resonates with diners. McDonald’s initiatives in this area should help to curb switching up to outlets serving risky burgers as incomes rise, if rolled out.

Most leading pub groups feature burgers on their menu at similar price points to gourmet burger bars. Pubs’ widespread presence means they pose substantial competition to gourmet burger venues and a significant potential channel for risky burgers. Gourmet-style burgers have also become a menu staple at a wide variety of restaurants.

Longer term, the ongoing development of the UK foodservice market poses established cuisine types with the challenge of holding their ground against the latest trends, as half of diners are always looking for new dishes to try. As well as putting pressure on gourmet burger venues, this could see burgers lose prevalence on the menus at the various competing channels.

Gourmet burger bars attract a small young and affluent user base

Gourmet Burger Sector Report January 2016

Two in five users prefer beef burgers not fully cooked

That around half of diners are eating beef burgers in foodservice is evidence of their role as a menu staple across a wide range of venues. Venues identified as potential channels for risky burgers, pubs and gourmet burger bars, attract visits from 27% and 18% of beef burger eaters respectively. While there is an overall preference for beef burgers well-done, 39% of eaters prefer medium or rare burgers. Preference for these is highest among demographic groups that dine out most often and that are the most likely to identify themselves as ‘foodies’. This preference is overwhelmingly fuelled by such burgers being seen to offer a superior eating experience in terms of taste, texture and juiciness. Given that this is a view held by current burger eaters, it is likely be sustained, although the demand for burgers on the whole may wane. 26% of survey respondents who had eaten beef burgers in the three months to October 2015 state having eaten a medium or rare burger in the last two weeks. Groups most likely to report doing so include 16-34-year-olds, ABC1s, urban dwellers, and those who describe their financial situation as healthy.

Market drivers Higher household income and a secure financial situation are key predictors of gourmet burger bar use. The expected rise in real household incomes over the next five years will facilitate trading up from these venues by some current users, but on balance, the market is likely to gain users.

Gourmet Burger Sector Report January 2016

Appendix - Methodology

Consumer research methodology

Exclusive and original quantitative consumer research is commissioned for almost all Mintel reports. Consumer research is conducted among a nationally representative sample of either adults or internet users and is generally carried out by Lightspeed GMI (online), Ipsos Mori (face to face), while other suppliers are used on an ad hoc basis as required. The results are only available in Mintel reports.

As with all survey data, the consideration should be held in mind when analysing the results, that reported behaviour does not necessarily capture people’s actual practices. Firstly, respondents may be reluctant to admit to certain opinions or behaviours due to social desirability bias. However, where surveys are conducted online, through self-completion and with no interviewer present, this should minimise the risk. There is also the risk that respondents may miss or misinterpret questions. However, control measures are in place to try and reduce this. Finally, respondents’ recall may not be accurate, a consideration which has been taken into account in the questionnaire design. Nevertheless, the fact that the survey data is self-reported should be kept in mind where behaviour or attitudes based on survey data are referred to.

Sampling and weighting

Online Surveys - Lightspeed GMI

Founded in 1999, GMI’s double opt-in online consumer panel has reach to approximately 350,000 consumers in Great Britain. Re-branded as Lightspeed GMI in September 2014 (after its acquisition by Kantar in 2011), it delivers uniquely identified online respondents via extensive use of fraud detection and location-verification technology at multiple points in the research cycle, from initial registration through survey fielding and incentive redemption. Lightspeed GMI panellists are profiled on a wide variety of attributes to deliver the specific hard-to-reach demographics.

Further details of the panel, including sample sources, recruitment and sample validation and panel management are available on request from Lightspeed GMI.

To ensure our surveys are nationally representative of internet users, Mintel sets quotas for each age group, split by gender. Specific quotas for a sample of 2,000 adults aged 16+ are shown below:

% N Age groups by gender

16-19 men 3.6 72 16-19 women 3.4 68

20-24 men 4.9 98 20-24 women 4.8 95

25-34 men 9.4 189 25-34 women 9.5 190

35-44 men 9.3 186 35-44 women 9.5 190

45-54 men 9.3 186 45-54 women 9.4 189

Gourmet Burger Sector Report January 2016

55-64 men 7.0 140 55-64 women 7.2 144

65+ men 5.7 113 65+ women 7.0 140

Total 100 2,000

Mintel also sets quotas on region and socio-economic group. Specific quotas for a sample of 2,000 adults aged 16+ are shown below:

% N Region

North East 4.2 84 North West 11.5 229 Yorkshire & Humberside 8.6 172 East Midlands 7.4 148 West Midlands 9.1 182 Greater London 13.4 269 South East/East Anglia 23.6 473 South West 8.6 172 Wales 5.0 99 Scotland 8.6 172

Total 100 2,000

% N Socio-economic group

AB 22.3 446 C1 30.9 618 C2 20.9 418 DE 25.9 518

Total 100 2,000 Definitions Socio-economic groups are based on the head of household or chief income earner and are defined as follows:

Socio-economic group Occupation of chief income earner

A Higher managerial, administrative or professional B Intermediate managerial, administrative or professional C1 Supervisory or clerical, and junior managerial, administrative or professional C2 Skilled manual workers D Semi and unskilled manual workers E All those entirely dependent on the state long term, through sickness, unemployment, old age or other reasons

Retired persons who have a company pension or private pension, or who have private means are graded on their previous occupation.

Gourmet Burger Sector Report January 2016

Students in higher education living at home are graded on the occupation of the head of the household. Students living away from home are graded C1 (no account is taken of casual or vacation jobs).

Desk research methodology

Mintel market analysts have reviewed leading trade press coverage of burgers and foodservice companies operating in this segment, also reviewing company press, websites and social media sites as well as annual company reports and accounts and mainstream consumer press.

This information is supplemented by an extensive library of Mintel’s reports produced since 1972 and added to each year by the 500+ reports which are produced annually, such as Burger and Chicken Restaurants (UK), August 2015 and Pub Catering (UK), May 2015.

Mintel followed a three-pronged approach to ascertain whether the identified leading chains serve pink or medium burgers: 1) a review of customer comments online 2) a review of the operators’ menus 3) phoning two-three venues for each chain to request staff to describe how the burgers are served and the presence of a company-wide policy on the matter. The reviews and interviews were undertaken 22nd-31st October 2015.

Nielsen Media Research

Nielsen Media Research (NMR) tracks advertising via the following channels: television, radio, press, internet display advertising, outdoor, cinema, direct mail and door drops. Spend on video, mobile, sponsorship, search and social is not currently measured by Nielsen Media Research. For most channels covered, Nielsen does not measure expenditure directly, but estimates it by monitoring usage and applying average measures of expenditure.

Gourmet Burger Sector Report January 2016

Appendix - Leading Pub Operators’ Burger Offering

FIGURE 28: SELECTED LEADING PUB OPERATORS, BY OUTLET NUMBERS AND PRESENCE OF BURGERS ON THE MENU, 2015

Company Main brand(s) March/April 2015 outlet Burgers featured on the numbers menu Spirit Pub Group Total 1,227 Chef & Brewer 138 Y Wacky Warehouse 95 na Local* 230 Taylor Walker 123** Y Fayre & Square 158 Y Enterprise Inns Total 5,348 menus n/a Greene King Total 1,898 Hungry Horse 235 Y Old English Inns 126 Y Mitchells & Butlers Total 1,775 All Bar One 50 Y Browns 27 Y Ember Inns and Ember Pub & 130 Y Dining Harvester 213 Y Nicholson’s 80 Y O’Neill’s 36 Y Crown Carveries 112 N Sizzling Pub Co 223 Y Toby Carvery 158 N Vintage Inns 194 Y Village Pub & Kitchen 38 N Miller & Carter 35 Y Alex 41 na JD Wetherspoon Total 927 Y Whitbread Total 405 Beefeater 142 Y Brewers Fayre 157 Y Table Table 99 Y Taybarns 7 Y Geronimo Inns Total 37 Y

* formerly known as ‘John Barras’

** includes ‘Metropolitan’ pubs

Note: Detailed outlet numbers are only provided for selected brands within the total portfolio of the listed operators

List of companies and outlet data originally published in “Burger and Chicken Restaurants”. Mintel, August 2015

SOURCE: MINTEL

Gourmet Burger Sector Report January 2016

Appendix - Consumer Survey Data – “Burger and Chicken Restaurants” The data in this section draws from consumer research conducted for “Burger and Chicken Restaurants”, Mintel, August 2015, commissioned by Mintel. Research was carried out by Lightspeed GMI among 2,000 internet users aged 16+ in May 2015. Gourmet burger bar and burger restaurant usage

FIGURE 29: BURGER RESTAURANT AND DOURMET BURGER BAR USAGE, BY DEMOGRAPHICS, MAY 2015

"Which, if any, of the following fast food outlets/restaurants have you eaten in or bought a takeaway from in the last 3 months?"

Base: 2,000 internet users aged 16+ Sample Any burger Gourmet burger size restaurant bar (eg Gourmet Burger Kitchen, Haché) N % % All 2,000 51 5

Gender: Male 997 51 6 Female 1,003 51 5

Age: 16-17 77* 68 8 20-24 190 66 12 25-34 381 65 11 35-44 368 53 5 45-54 377 49 2 55-64 280 39 3 65+ 266 24 1

16-24 328 67 10 25-34 381 65 11 35-44 368 53 5 45-54 377 49 2 55+ 546 31 2

16-34 709 66 10 35-44 368 53 5 45-64 657 44 2 65+ 266 24 1

16-44 1,077 61 8 45+ 923 38 2

16-17 77* 68 8 18-24 251 67 11 25-34 381 65 11 35-44 368 53 5 45-54 377 49 2 55+ 546 31 2

Gender by age UK: Male 16-24 166 64 8 Male 25-44 372 60 9 Male 45-64 325 45 2

Gourmet Burger Sector Report January 2016

Male 65+ 134 25 1 Female 16-24 162 69 12 Female 25-44 377 58 7 Female 45-64 332 44 2 Female 65+ 132 22 0

Region: Scotland 171 52 5 North East 84* 49 6 North West 228 49 3 Yorkshire & Humberside 171 46 6 East Midlands 148 50 5 West Midlands 182 48 6 Inner & Greater London 270 59 9 South East/East Anglia 474 52 5 South West 173 40 3 Wales 99* 59 6

Scotland 171 52 5 North East/North West 312 49 4 Yorkshire & Humberside 171 46 6 East Midlands 148 50 5 West Midlands 182 48 6 Inner & Greater London 270 59 9 South East/East Anglia 474 52 5 South West/Wales 272 47 4

Area: Urban location (ie living in a town/city) 819 57 8 Suburban/village/rural 1,181 47 4 Suburban location (ie close to town/city but living outside a 792 49 4 town/city) Village/rural location 389 42 3

Working status: Employed 1,046 57 7 Employee full-time (30+ hours/week) 760 58 9 Employee part-time (less than 30 hours/week) 286 56 3 Self-employed 134 45 7 Self-employed full-time (30+ hours/week) 77* 55 9 In full-time education 164 65 7 Retired 333 28 2 Not working for any other reason 323 49 2

Socio-economic group: A 99* 63 12 B 347 48 8 C1 618 49 6 C2 418 56 5 D 244 57 2 E 274 39 2

AB 446 52 9 C1C2 1,036 52 6 DE 518 47 2

ABC1 1,064 50 7 C2DE 936 51 3

Highest level of education: No formal qualification 103 35 1 GCSE/O-level or equivalent 479 53 3 AS/A-level or equivalent 328 59 6

Gourmet Burger Sector Report January 2016

Vocational qualification (eg NVQs, BTEC etc) 330 49 2 Further qualification (HNC, HND etc) 134 41 3 University degree (including undergraduate and master's 527 52 11 degrees)

Gross annual household income: Under £9,500 171 46 2 £9,500-15,499 296 44 4 £15,500-24,999 423 54 4 £25,000-49,999 671 53 5 £50,000-74,999 167 56 13 £75,000 or over 83* 55 10 Rather not say 123 38 7

Under £15,500 467 45 3 £15,500-24,999 423 54 4 £25,000-49,999 671 53 5 £50,000 or over 250 56 12 Don't know/ Rather not say 189 43 7

Housing situation: My home is being bought on a mortgage 619 53 5 My home is owned outright 576 40 4 My home is rented from a Local Authority 184 60 5 My home is rented from a private landlord 401 60 7 My home is rented from a housing association 164 47 4

Presence of own children: Aged 5 and under 213 71 11 Aged 6-12 276 68 6 Aged 13-17 258 67 5 Aged 13-15 158 70 5 Aged 16-17 140 66 5 Aged 18+ 242 49 3 I am not the parent/guardian of any children in my household 1,281 45 5

Parent (of under-18s): Parent (of under-18s) 556 67 7 Other 1,444 44 5

Parent (of under-16s): Parent (of under-16s) 487 68 7 Other 1,513 45 5

Parent status UK: Mothers – Parent (of under-16s) 268 67 6 Fathers – Parent (of under-16s) 219 68 9

Household size: 1 353 41 4 2 692 41 5 3 408 56 5 4 357 64 7 5 or more 190 69 9

Current marital status: Non-married 875 52 7 Single 666 56 8 Married/Civil Partnership/Living As Married 1,125 50 4 Separated/divorced/widowed 209 41 2 Divorced 119 40 0

Financial situation:

Gourmet Burger Sector Report January 2016

Healthy – I have money left at the end of the month for a few 520 48 7 luxuries or to add to my savings OK – I get by, but there's not a lot left by the time the basics are 887 54 6 taken care of Tight – I'm making ends meet, but only just 431 48 4 Struggling – I'm in danger of falling behind with bills or loan 116 50 2 repayments Struggling/In trouble 162 50 2

Generations: Millennials (16-35) 743 65 11 Millennials (younger) (1990-99) (16-25) 361 66 11 Millennials (older) (1980-89) (26-35) 382 64 11 Generation X (1965-79) (36-50) 557 53 3 Baby Boomers (1946-64) (51-69) 589 36 2 Swing Generation/World War II (1945 or before) (70+) 111 22 1

* Small sub-sample (75-100) SOURCE: LIGHTSPEED GMI/MINTEL

Attitudes

FIGURE 30: AGREEMENT WITH THE STATEMENT “IF I HAD MORE MONEY I WOULD EAT AT OTHER FOOD OUTLETS/RESTAURANTS MORE INSTEAD OF FAST FOOD RESTAURANTS”, BY DEMOGRAPHICS, MAY 2015

Base: 1,292 internet users aged 16+ who have eaten in or have bought a takeaway from a fast food restaurant/outlet in the last three months

Sample Strongly Agree Neither agree Disagree Strongly size agree nor disagree disagree N % % % % % All 1,292 14 33 35 13 5

Gender: Male 660 12 31 36 16 5 Female 632 15 35 34 11 4

Age: 20-24 154 16 44 31 6 3 25-34 305 18 36 36 9 1 35-44 248 15 30 34 15 5 45-54 232 9 28 37 16 10 55-64 136 7 26 40 21 5 65+ 99* 9 28 35 21 6

16-24 272 18 42 31 8 2 25-34 305 18 36 36 9 1 35-44 248 15 30 34 15 5 45-54 232 9 28 37 16 10 55+ 235 8 27 38 21 6

16-34 577 18 39 33 8 2 35-44 248 15 30 34 15 5 45-64 368 8 27 38 18 8 65+ 99* 9 28 35 21 6

16-44 825 17 36 34 10 3 45+ 467 8 28 37 19 8

18-24 206 17 40 32 8 2 25-34 305 18 36 36 9 1

Gourmet Burger Sector Report January 2016

35-44 248 15 30 34 15 5 45-54 232 9 28 37 16 10 55+ 235 8 27 38 21 6

Gender by age UK: Male 16-24 137 14 40 34 7 4 Male 25-44 288 16 30 35 15 4 Male 45-64 186 8 26 39 20 8 Female 16-24 135 21 43 27 9 0 Female 25-44 265 17 37 35 8 2 Female 45-64 182 8 29 37 16 9

Region: Scotland 110 17 31 35 15 2 North West 150 11 35 37 13 4 Yorkshire & Humberside 106 8 34 42 8 8 East Midlands 97* 16 34 33 13 3 West Midlands 114 13 36 34 14 3 Inner & Greater London 195 20 35 29 13 3 South East/East Anglia 307 13 36 32 14 5 South West 94* 12 33 33 16 6

Scotland 110 17 31 35 15 2 North East/North West 201 11 31 39 13 5 Yorkshire & Humberside 106 8 34 42 8 8 East Midlands 97* 16 34 33 13 3 West Midlands 114 13 36 34 14 3 Inner & Greater London 195 20 35 29 13 3 South East/East Anglia 307 13 36 32 14 5 South West/Wales 162 12 26 40 15 7

Area: Urban location (ie living in a town/city) 580 18 33 33 11 4 Suburban/village/rural 712 11 33 36 15 5 Suburban location (ie close to 505 10 35 35 16 4 town/city but living outside a town/city) Village/rural location 207 14 29 39 14 6

Working status: Employed 750 15 34 34 13 5 Employee full-time (30+ hours/week) 552 15 34 32 13 5 Employee part-time (less than 30 198 14 33 38 11 4 hours/week) Self-employed 78* 19 24 33 19 4 In full-time education 136 17 40 32 10 1 Retired 131 7 28 38 21 6 Not working for any other reason 197 11 32 40 12 5

Socio-economic group: B 229 16 32 29 18 4 C1 392 15 34 34 12 5 C2 294 13 31 38 14 4 D 164 10 35 40 11 4 E 143 10 34 36 14 5

AB 299 17 33 29 16 5 C1C2 686 14 33 36 13 5 DE 307 10 35 38 12 4

ABC1 691 16 33 32 14 5 C2DE 601 12 33 38 13 4

Highest level of education:

Gourmet Burger Sector Report January 2016

GCSE/O-level or equivalent 312 10 33 39 16 3 AS/A-level or equivalent 236 15 33 36 11 4 Vocational qualification (eg NVQs, 213 13 30 38 15 4 BTEC etc) Further qualification (HNC, HND etc) 77* 17 30 29 14 10 University degree (including 339 17 39 29 11 4 undergraduate and master's degrees)

Gross annual household income: Under £9,500 102 12 34 41 9 4 £9,500-15,499 173 13 31 35 16 5 £15,500-24,999 280 16 31 35 15 3 £25,000-49,999 454 16 35 33 12 4 £50,000-74,999 118 13 33 29 18 8

Under £15,500 275 12 32 37 13 5 £15,500-24,999 280 16 31 35 15 3 £25,000-49,999 454 16 35 33 12 4 £50,000 or over 173 12 34 29 15 9 Don't know/ Rather not say 110 8 30 45 12 5

Housing situation: My home is being bought on a 434 15 35 33 13 4 mortgage My home is owned outright 292 11 30 34 18 7 My home is rented from a Local 130 12 29 42 13 4 Authority My home is rented from a private 289 16 34 35 12 3 landlord My home is rented from a housing 107 15 36 38 7 5 association

Presence of own children: Aged 5 and under 186 19 38 30 11 3 Aged 6-12 229 19 34 32 11 3 Aged 13-17 206 14 31 33 16 6 Aged 13-15 131 16 31 34 15 4 Aged 16-17 109 11 28 37 17 7 Aged 18+ 152 10 35 37 14 5 I am not the parent/guardian of any 748 14 32 36 14 5 children in my household

Parent (of under-18s): Parent (of under-18s) 454 16 34 33 13 4 Other 838 13 33 36 14 5

Parent (of under-16s): Parent (of under-16s) 402 16 34 34 13 3 Other 890 13 33 36 14 5

Parent status UK: Mothers – Parent (of under-16s) 218 14 40 35 9 2 Fathers – Parent (of under-16s) 184 20 26 33 17 4

Household size: 1 188 12 32 39 13 4 2 369 13 30 36 16 5 3 286 14 38 32 12 4 4 292 15 32 33 14 5 5 or more 157 17 35 38 8 3

Current marital status: Non-married 577 15 37 35 11 3

Gourmet Burger Sector Report January 2016

Single 469 15 37 35 10 3 Married/Civil Partnership/Living As 715 13 30 35 16 6 Married Separated/divorced/widowed 108 14 39 32 13 2

Financial situation: Healthy – I have money left at the end 326 15 26 34 17 8 of the month for a few luxuries or to add to my savings OK – I get by, but there's not a lot left 600 14 36 36 11 3 by the time the basics are taken care of Tight – I'm making ends meet, but only 269 11 34 38 13 4 just Struggling/In trouble 97* 15 36 28 18 3

Generations: Millennials (16-35) 602 18 38 33 9 2 Millennials (younger) (1990-99) (16- 299 19 40 32 7 2 25) Millennials (older) (1980-89) (26-35) 303 17 37 35 10 1 Generation X (1965-79) (36-50) 367 13 31 34 15 7 Baby Boomers (1946-64) (51-69) 281 7 26 39 21 7

* Small sub-sample (75-100) SOURCE: LIGHTSPEED GMI/MINTEL

FIGURE 31: AGREEMENT WITH THE STATEMENT “I WOULD BE INTERESTED IN TRYING GOURMET BURGERS AT FAST FOOD CHAINS (EG MCDONALD'S)”, BY DEMOGRAPHICS, MAY 2015

Base: 1,292 internet users aged 16+ who have eaten in or have bought a takeaway from a fast food restaurant/outlet in the last three months

Strongly Agree Neither Disagree Strongly agree agree nor disagree disagree N % % % % % All 1,292 11 41 32 11 5

Gender: Male 660 12 42 33 10 3 Female 632 11 40 30 13 6

Age: 20-24 154 14 43 29 11 3 25-34 305 13 43 31 11 2 35-44 248 14 40 32 8 6 45-54 232 10 47 29 9 5 55-64 136 4 43 31 15 7 65+ 99* 9 26 41 15 8

16-24 272 13 39 31 13 4 25-34 305 13 43 31 11 2 35-44 248 14 40 32 8 6 45-54 232 10 47 29 9 5 55+ 235 6 36 35 15 8

16-34 577 13 41 31 12 3 35-44 248 14 40 32 8 6 45-64 368 8 45 30 11 6 65+ 99* 9 26 41 15 8

Gourmet Burger Sector Report January 2016

16-44 825 13 41 31 11 4 45+ 467 8 41 32 12 6

18-24 206 13 42 31 11 3 25-34 305 13 43 31 11 2 35-44 248 14 40 32 8 6 45-54 232 10 47 29 9 5 55+ 235 6 36 35 15 8

Gender by age UK: Male 16-24 137 15 42 30 9 4 Male 25-44 288 15 41 33 9 2 Male 45-64 186 6 49 31 10 4 Female 16-24 135 10 37 33 16 4 Female 25-44 265 12 42 30 11 5 Female 45-64 182 9 41 29 13 8

Region: Scotland 110 9 49 31 8 3 North West 150 10 43 30 10 7 Yorkshire & Humberside 106 15 37 36 8 4 East Midlands 97* 7 45 35 9 3 West Midlands 114 15 35 35 9 6 Inner & Greater London 195 11 44 26 14 5 South East/East Anglia 307 11 41 30 12 6 South West 94* 12 39 30 16 3

Scotland 110 9 49 31 8 3 North East/North West 201 10 42 31 10 6 Yorkshire & Humberside 106 15 37 36 8 4 East Midlands 97* 7 45 35 9 3 West Midlands 114 15 35 35 9 6 Inner & Greater London 195 11 44 26 14 5 South East/East Anglia 307 11 41 30 12 6 South West/Wales 162 13 33 36 15 3

Area: Urban location (ie living in a town/city) 580 13 42 30 11 5 Suburban/village/rural 712 10 40 33 12 5 Suburban location (ie close to town/city 505 11 40 31 13 5 but living outside a town/city) Village/rural location 207 9 39 39 8 5

Working status: Employed 750 13 45 29 9 4 Employee full-time (30+ hours/week) 552 14 44 28 10 3 Employee part-time (less than 30 198 9 46 32 9 5 hours/week) Self-employed 78* 8 37 35 15 5 In full-time education 136 9 32 39 16 4 Retired 131 7 34 37 15 7 Not working for any other reason 197 12 38 31 10 8

Socio-economic group: B 229 10 37 33 14 7 C1 392 11 43 31 11 4 C2 294 14 44 28 10 4 D 164 9 42 35 13 1 E 143 10 32 41 10 7

AB 299 12 39 30 12 7 C1C2 686 12 43 30 10 4

Gourmet Burger Sector Report January 2016

DE 307 9 37 37 12 4

ABC1 691 11 41 31 11 5 C2DE 601 11 41 33 11 4

Highest level of education: GCSE/O-level or equivalent 312 10 42 34 11 4 AS/A-level or equivalent 236 14 39 29 12 6 Vocational qualification (eg NVQs, 213 10 40 31 14 4 BTEC etc) Further qualification (HNC, HND etc) 77* 9 42 38 8 4 University degree (including 339 13 44 27 10 6 undergraduate and master's degrees)

Gross annual household income: Under £9,500 102 9 36 45 7 3 £9,500-15,499 173 9 38 34 14 6 £15,500-24,999 280 12 41 33 9 5 £25,000-49,999 454 13 43 28 12 5 £50,000-74,999 118 14 46 25 10 5

Under £15,500 275 9 37 38 11 5 £15,500-24,999 280 12 41 33 9 5 £25,000-49,999 454 13 43 28 12 5 £50,000 or over 173 13 46 26 10 6 Don't know/ Rather not say 110 8 35 39 15 3

Housing situation: My home is being bought on a 434 14 40 30 12 4 mortgage My home is owned outright 292 10 42 29 11 8 My home is rented from a Local 130 12 42 35 7 5 Authority My home is rented from a private 289 9 42 33 12 4 landlord My home is rented from a housing 107 13 37 36 10 4 association

Presence of own children: Aged 5 and under 186 13 42 34 6 4 Aged 6-12 229 21 41 30 5 3 Aged 13-17 206 14 45 26 11 4 Aged 13-15 131 16 46 26 8 4 Aged 16-17 109 12 45 25 14 5 Aged 18+ 152 13 45 29 10 3 I am not the parent/guardian of any 748 10 39 32 13 5 children in my household

Parent (of under-18s): Parent (of under-18s) 454 15 44 30 8 4 Other 838 10 39 33 13 5

Parent (of under-16s): Parent (of under-16s) 402 16 43 31 7 4 Other 890 9 40 32 13 5

Parent status UK: Mothers – Parent (of under-16s) 218 14 44 29 8 4 Fathers – Parent (of under-16s) 184 17 42 33 5 3

Household size: 1 188 11 39 31 12 6 2 369 9 39 32 15 5

Gourmet Burger Sector Report January 2016

3 286 10 47 30 9 4 4 292 11 38 33 12 5 5 or more 157 20 43 32 4 2

Current marital status: Non-married 577 11 42 31 12 4 Single 469 12 41 31 12 4 Married/Civil Partnership/Living As 715 11 40 32 11 5 Married Separated/divorced/widowed 108 9 44 29 13 6

Financial situation: Healthy – I have money left at the end 326 16 38 27 11 8 of the month for a few luxuries or to add to my savings OK – I get by, but there's not a lot left 600 11 45 29 13 4 by the time the basics are taken care of Tight – I'm making ends meet, but only 269 8 37 44 8 3 just Struggling/In trouble 97* 10 39 32 11 7

Generations: Millennials (16-35) 602 13 41 31 11 3 Millennials (younger) (1990-99) (16-25) 299 12 39 31 13 4 Millennials (older) (1980-89) (26-35) 303 14 43 31 10 2 Generation X (1965-79) (36-50) 367 12 43 32 8 5 Baby Boomers (1946-64) (51-69) 281 6 40 32 14 8

* Small sub-sample (75-100) SOURCE: LIGHTSPEED GMI/MINTEL

FIGURE 32: AGREEMENT WITH THE STATEMENT “GOURMET BURGERS (EG FROM GOURMET BURGER KITCHEN) ARE BETTER FOR YOU THAN BURGERS FROM A FAST FOOD RESTAURANT”, BY DEMOGRAPHICS, MAY 2015

Base: 1,292 internet users aged 16+ who have eaten in or have bought a takeaway from a fast food restaurant/outlet in the last three months

Strongly Agree Neither Disagree Strongly agree agree nor disagree disagree N % % % % % All 1,292 8 31 49 9 2

Gender: Male 660 9 31 49 10 2 Female 632 8 30 50 9 3

Age: 20-24 154 13 39 39 5 5 25-34 305 8 36 45 9 1 35-44 248 10 33 46 9 2 45-54 232 7 22 58 12 1 55-64 136 2 26 55 14 3 65+ 99* 6 21 63 6 4

16-24 272 12 35 43 7 3 25-34 305 8 36 45 9 1 35-44 248 10 33 46 9 2 45-54 232 7 22 58 12 1 55+ 235 4 24 58 11 3

Gourmet Burger Sector Report January 2016

16-34 577 10 36 44 8 2 35-44 248 10 33 46 9 2 45-64 368 5 24 57 13 2 65+ 99* 6 21 63 6 4

16-44 825 10 35 44 8 2 45+ 467 5 23 58 11 2

18-24 206 13 37 41 5 4 25-34 305 8 36 45 9 1 35-44 248 10 33 46 9 2 45-54 232 7 22 58 12 1 55+ 235 4 24 58 11 3

Gender by age UK: Male 16-24 137 12 39 39 7 3 Male 25-44 288 10 34 44 10 2 Male 45-64 186 6 21 62 11 1 Female 16-24 135 13 31 47 6 4 Female 25-44 265 9 35 47 8 2 Female 45-64 182 4 26 52 14 3

Region: Scotland 110 7 32 51 8 2 North West 150 9 27 52 9 3 Yorkshire & Humberside 106 11 32 42 12 3 East Midlands 97* 9 41 42 4 3 West Midlands 114 10 26 54 9 2 Inner & Greater London 195 11 34 44 10 2 South East/East Anglia 307 8 30 50 9 3 South West 94* 3 32 49 14 2

Scotland 110 7 32 51 8 2 North East/North West 201 8 27 53 9 2 Yorkshire & Humberside 106 11 32 42 12 3 East Midlands 97* 9 41 42 4 3 West Midlands 114 10 26 54 9 2 Inner & Greater London 195 11 34 44 10 2 South East/East Anglia 307 8 30 50 9 3 South West/Wales 162 4 26 56 12 1

Area: Urban location (ie living in a town/city) 580 10 34 44 10 3 Suburban/village/rural 712 7 28 54 9 2 Suburban location (ie close to town/city but 505 7 29 53 9 2 living outside a town/city) Village/rural location 207 7 26 56 10 2

Working status: Employed 750 10 34 45 9 2 Employee full-time (30+ hours/week) 552 11 34 45 8 2 Employee part-time (less than 30 198 7 33 45 12 3 hours/week) Self-employed 78* 5 33 47 12 3 In full-time education 136 12 30 51 6 1 Retired 131 5 20 65 7 4 Not working for any other reason 197 5 24 56 13 2

Socio-economic group: B 229 10 34 43 10 2 C1 392 8 32 48 9 2 C2 294 9 33 49 8 2 D 164 5 23 59 10 3

Gourmet Burger Sector Report January 2016

E 143 6 21 56 15 3

AB 299 12 35 43 8 2 C1C2 686 8 33 49 9 2 DE 307 5 22 58 12 3

ABC1 691 10 33 46 9 2 C2DE 601 7 27 53 10 2

Highest level of education: GCSE/O-level or equivalent 312 7 24 59 8 3 AS/A-level or equivalent 236 11 31 46 9 3 Vocational qualification (eg NVQs, BTEC 213 6 28 55 10 1 etc) Further qualification (HNC, HND etc) 77* 6 29 56 6 3 University degree (including 339 12 37 37 12 1 undergraduate and master's degrees)

Gross annual household income: Under £9,500 102 9 25 55 9 2 £9,500-15,499 173 6 28 51 11 3 £15,500-24,999 280 8 29 50 10 3 £25,000-49,999 454 9 34 46 9 2 £50,000-74,999 118 10 33 46 9 2

Under £15,500 275 7 27 53 10 3 £15,500-24,999 280 8 29 50 10 3 £25,000-49,999 454 9 34 46 9 2 £50,000 or over 173 12 34 45 8 2 Don't know/ Rather not say 110 5 24 59 11 2

Housing situation: My home is being bought on a mortgage 434 12 34 45 8 1 My home is owned outright 292 6 26 55 9 4 My home is rented from a Local Authority 130 5 26 52 14 3 My home is rented from a private landlord 289 8 32 47 11 2 My home is rented from a housing 107 7 25 59 7 1 association

Presence of own children: Aged 5 and under 186 12 35 45 6 2 Aged 6-12 229 10 35 46 7 1 Aged 13-17 206 9 32 47 11 1 Aged 13-15 131 8 31 48 11 2 Aged 16-17 109 12 32 44 11 1 Aged 18+ 152 8 26 51 14 1 I am not the parent/guardian of any 748 8 29 51 10 3 children in my household

Parent (of under-18s): Parent (of under-18s) 454 10 34 47 7 2 Other 838 7 29 51 10 3

Parent (of under-16s): Parent (of under-16s) 402 10 35 47 7 1 Other 890 8 29 51 10 3

Parent status UK: Mothers – Parent (of under-16s) 218 9 35 50 5 1 Fathers – Parent (of under-16s) 184 12 34 43 9 2

Household size: 1 188 8 29 52 8 4

Gourmet Burger Sector Report January 2016

2 369 7 26 53 11 3 3 286 9 36 45 8 2 4 292 10 32 45 12 2 5 or more 157 10 30 54 5 1

Current marital status: Non-married 577 9 31 48 10 2 Single 469 10 31 48 8 3 Married/Civil Partnership/Living As Married 715 8 30 50 9 2 Separated/divorced/widowed 108 5 28 50 17 1

Financial situation: Healthy – I have money left at the end of 326 11 32 44 10 3 the month for a few luxuries or to add to my savings OK – I get by, but there's not a lot left by 600 8 33 49 8 2 the time the basics are taken care of Tight – I'm making ends meet, but only just 269 9 27 53 10 1 Struggling/In trouble 97* 3 23 57 15 2

Generations: Millennials (16-35) 602 11 35 44 8 2 Millennials (younger) (1990-99) (16-25) 299 12 36 43 6 3 Millennials (older) (1980-89) (26-35) 303 10 34 45 10 1 Generation X (1965-79) (36-50) 367 7 31 50 10 2 Baby Boomers (1946-64) (51-69) 281 5 20 59 13 2

* Small sub-sample (75-100) SOURCE: LIGHTSPEED GMI/MINTEL

FIGURE 33: AGREEMENT WITH THE STATEMENT “BURGER RESTAURANTS SHOULD HAVE THE OPTION TO COOK BEEF BURGERS RARE”, BY DEMOGRAPHICS, MAY 2015

Base: 1,292 internet users aged 16+ who have eaten in or have bought a takeaway from a fast food restaurant/outlet in the last three months

Strongly Agree Neither Disagree Strongly agree agree nor disagre disagree e N % % % % % All 1,292 7 23 37 23 10

Gender: Male 660 8 28 37 19 8 Female 632 6 18 38 26 12

Age: 20-24 154 9 30 34 18 10 25-34 305 8 29 34 22 8 35-44 248 10 24 31 22 13 45-54 232 6 21 36 27 10 55-64 136 2 15 46 24 13 65+ 99* 4 11 47 25 12

16-24 272 8 26 38 19 9 25-34 305 8 29 34 22 8 35-44 248 10 24 31 22 13 45-54 232 6 21 36 27 10 55+ 235 3 13 47 25 12

Gourmet Burger Sector Report January 2016

16-34 577 8 27 36 21 8 35-44 248 10 24 31 22 13 45-64 368 4 19 40 26 11 65+ 99* 4 11 47 25 12

16-44 825 8 26 34 21 10 45+ 467 4 17 42 26 11

18-24 206 8 28 37 17 10 25-34 305 8 29 34 22 8 35-44 248 10 24 31 22 13 45-54 232 6 21 36 27 10 55+ 235 3 13 47 25 12

Gender by age UK: Male 16-24 137 11 30 36 18 6 Male 25-44 288 9 31 33 18 8 Male 45-64 186 5 25 40 21 9 Female 16-24 135 5 21 39 21 13 Female 25-44 265 8 22 33 26 12 Female 45-64 182 4 13 40 31 13

Region: Scotland 110 4 18 42 23 14 North West 150 6 21 41 19 13 Yorkshire & Humberside 106 8 22 39 20 12 East Midlands 97* 11 22 34 18 15 West Midlands 114 4 32 34 21 8 Inner & Greater London 195 9 22 35 27 7 South East/East Anglia 307 7 27 33 23 10 South West 94* 7 21 36 30 5

Scotland 110 4 18 42 23 14 North East/North West 201 6 22 40 20 11 Yorkshire & Humberside 106 8 22 39 20 12 East Midlands 97* 11 22 34 18 15 West Midlands 114 4 32 34 21 8 Inner & Greater London 195 9 22 35 27 7 South East/East Anglia 307 7 27 33 23 10 South West/Wales 162 7 17 41 27 7

Area: Urban location (ie living in a town/city) 580 9 26 33 22 9 Suburban/village/rural 712 5 21 40 24 11 Suburban location (ie close to town/city 505 5 21 39 24 11 but living outside a town/city) Village/rural location 207 5 20 42 23 10

Working status: Employed 750 9 26 34 22 10 Employee full-time (30+ hours/week) 552 9 28 33 19 10 Employee part-time (less than 30 198 6 19 34 29 12 hours/week) Self-employed 78* 8 33 37 17 5 In full-time education 136 7 22 41 23 7 Retired 131 4 9 47 30 10 Not working for any other reason 197 2 19 40 24 15

Socio-economic group: B 229 7 22 32 28 10 C1 392 8 23 35 23 10 C2 294 8 26 38 20 7 D 164 5 20 43 22 10

Gourmet Burger Sector Report January 2016

E 143 1 17 48 22 12

AB 299 8 24 30 26 12 C1C2 686 8 25 36 22 9 DE 307 3 19 45 22 11

ABC1 691 8 24 33 24 11 C2DE 601 5 22 42 21 9

Highest level of education: GCSE/O-level or equivalent 312 6 21 38 25 10 AS/A-level or equivalent 236 8 25 32 23 11 Vocational qualification (eg NVQs, BTEC 213 5 23 40 23 9 etc) Further qualification (HNC, HND etc) 77* 4 27 29 22 18 University degree (including 339 9 24 37 21 8 undergraduate and master's degrees)

Gross annual household income: Under £9,500 102 5 19 49 18 10 £9,500-15,499 173 7 18 36 23 15 £15,500-24,999 280 8 21 39 21 11 £25,000-49,999 454 7 29 32 25 8 £50,000-74,999 118 11 26 29 25 8

Under £15,500 275 6 19 41 21 13 £15,500-24,999 280 8 21 39 21 11 £25,000-49,999 454 7 29 32 25 8 £50,000 or over 173 10 25 31 24 10 Don't know/ Rather not say 110 2 12 55 21 11

Housing situation: My home is being bought on a mortgage 434 7 25 32 26 9 My home is owned outright 292 6 18 40 23 13 My home is rented from a Local Authority 130 8 25 42 15 10 My home is rented from a private 289 6 28 35 22 9 landlord My home is rented from a housing 107 8 17 41 24 9 association

Presence of own children: Aged 5 and under 186 9 30 32 20 10 Aged 6-12 229 10 28 29 25 9 Aged 13-17 206 14 22 31 25 8 Aged 13-15 131 15 24 31 24 6 Aged 16-17 109 14 20 31 25 10 Aged 18+ 152 8 22 37 25 9 I am not the parent/guardian of any 748 5 20 41 23 11 children in my household

Parent (of under-18s): Parent (of under-18s) 454 10 28 30 22 9 Other 838 5 20 41 23 11

Parent (of under-16s): Parent (of under-16s) 402 10 28 30 22 9 Other 890 5 21 40 23 11

Parent status UK: Mothers – Parent (of under-16s) 218 9 25 31 25 11 Fathers – Parent (of under-16s) 184 12 33 30 18 7

Household size:

Gourmet Burger Sector Report January 2016

1 188 7 18 41 17 16 2 369 5 21 38 27 9 3 286 6 29 36 21 9 4 292 9 23 34 25 10 5 or more 157 10 24 37 22 7

Current marital status: Non-married 577 7 23 39 20 10 Single 469 7 26 38 19 10 Married/Civil Partnership/Living As 715 6 23 36 25 10 Married Separated/divorced/widowed 108 8 13 44 25 10

Financial situation: Healthy – I have money left at the end of 326 10 20 37 23 11 the month for a few luxuries or to add to my savings OK – I get by, but there's not a lot left by 600 6 26 35 24 9 the time the basics are taken care of Tight – I'm making ends meet, but only 269 5 24 43 17 10 just Struggling/In trouble 97* 6 16 35 30 12

Generations: Millennials (16-35) 602 8 28 35 21 8 Millennials (younger) (1990-99) (16-25) 299 8 25 38 20 9 Millennials (older) (1980-89) (26-35) 303 9 30 32 22 8 Generation X (1965-79) (36-50) 367 8 24 34 23 12 Baby Boomers (1946-64) (51-69) 281 3 14 43 26 13

* Small sub-sample (75-100) SOURCE: LIGHTSPEED GMI/MINTEL

Menu enticements

FIGURE 34: CHICKEN/BURGER BAR MENU ENTICEMENTS, BY DEMOGRAPHICS, MAY 2015 "Which, if any, of the following would you be most interested in trying at a fast food restaurant (eg McDonald’s, Burger King etc)?"

Base: 1,292 internet users aged 16+ who have eaten in or have bought a takeaway from a fast food restaurant/outlet in the last three months All %

Burgers containing thicker meat 29 Different types of meat burger (eg pork, lamb, turkey) 28 A greater selection of burger toppings (eg chorizo) 26 Burgers made using more premium bread (eg brioche bun) 24 A greater selection of dips/sauces (eg wasabi mayonnaise) 19 A greater selection of sides (eg deep fried pickles, guacamole) 19 A greater variety of fish/shellfish dishes (eg prawns in a crispy coating, Thai fishcake) 18 A greater variety of vegetarian burgers (eg Quorn burger, Portobello mushroom 17 burger) Mini chicken, beef or veggie burgers (eg sliders) 16 Ethnic-style dishes (eg falafel 'nuggets') 13 Grain based side dishes (eg quinoa, rice pots) 13 None of these 19

SOURCE: LIGHTSPEED GMI/MINTEL

Gourmet Burger Sector Report January 2016

FIGURE 35: SELECTED CHICKEN/BURGER BAR MENU ENTICEMENTS, BY DEMOGRAPHICS, MAY 2015 "Which, if any, of the following would you be most interested in trying at a fast food restaurant (eg McDonald’s, Burger King etc)?"

Base: 1,292 internet users aged 16+ who have eaten in or have bought a takeaway from a fast food restaurant/outlet in the last three months

Sample Burgers Different A greater Burgers made size containing types of meat selection of using more thicker burger (eg burger premium bread meat pork, lamb, toppings (eg brioche turkey) (eg chorizo) bun) N % % % % All 1,292 29 28 26 24

Gender: Male 660 36 30 29 25 Female 632 22 26 23 23

Age: 20-24 154 34 20 31 23 25-34 305 29 29 27 25 35-44 248 32 31 25 25 45-54 232 28 25 28 24 55-64 136 27 31 21 24 65+ 99* 25 28 13 25

16-24 272 31 26 32 22 25-34 305 29 29 27 25 35-44 248 32 31 25 25 45-54 232 28 25 28 24 55+ 235 26 30 17 24

16-34 577 30 28 29 24 35-44 248 32 31 25 25 45-64 368 28 27 26 24 65+ 99* 25 28 13 25

16-44 825 31 29 28 24 45+ 467 27 28 23 24

18-24 206 30 23 30 20 25-34 305 29 29 27 25 35-44 248 32 31 25 25 45-54 232 28 25 28 24 55+ 235 26 30 17 24

Gender by age UK: Male 16-24 137 34 23 33 20 Male 25-44 288 37 32 26 28 Male 45-64 186 39 34 34 26 Female 16-24 135 28 30 30 24 Female 25-44 265 23 27 25 22 Female 45-64 182 16 20 17 21

Region: Scotland 110 21 30 31 27 North West 150 25 29 16 22 Yorkshire & Humberside 106 28 28 35 28 East Midlands 97* 33 32 30 22 West Midlands 114 30 25 26 21 Inner & Greater London 195 26 27 28 24

Gourmet Burger Sector Report January 2016

South East/East Anglia 307 34 27 24 22 South West 94* 35 31 24 32

Scotland 110 21 30 31 27 North East/North West 201 25 30 19 23 Yorkshire & Humberside 106 28 28 35 28 East Midlands 97* 33 32 30 22 West Midlands 114 30 25 26 21 Inner & Greater London 195 26 27 28 24 South East/East Anglia 307 34 27 24 22 South West/Wales 162 35 28 25 27

Area: Urban location (ie living in a 580 29 30 28 25 town/city) Suburban/village/rural 712 30 27 25 23 Suburban location (ie close to 505 30 27 25 24 town/city but living outside a town/city) Village/rural location 207 29 28 25 22

Working status: Employed 750 31 28 27 24 Employee full-time (30+ 552 33 30 29 25 hours/week) Employee part-time (less than 30 198 25 24 23 22 hours/week) Self-employed 78* 29 26 29 26 In full-time education 136 30 29 34 23 Retired 131 24 30 16 28 Not working for any other reason 197 28 28 22 21

Socio-economic group: B 229 21 29 23 28 C1 392 28 28 31 25 C2 294 32 28 26 24 D 164 29 27 19 15 E 143 34 27 23 21

AB 299 27 30 25 29 C1C2 686 30 28 29 25 DE 307 31 27 21 18

ABC1 691 28 29 29 27 C2DE 601 32 28 23 21

Highest level of education: GCSE/O-level or equivalent 312 31 25 23 21 AS/A-level or equivalent 236 31 29 30 23 Vocational qualification (eg 213 29 26 21 20 NVQs, BTEC etc) Further qualification (HNC, HND 77* 30 35 25 29 etc) University degree (including 339 28 30 29 28 undergraduate and master's degrees)

Gross annual household income: Under £9,500 102 37 26 23 21 £9,500-15,499 173 26 28 24 20 £15,500-24,999 280 29 25 28 23 £25,000-49,999 454 30 32 26 25 £50,000-74,999 118 37 28 29 30

Gourmet Burger Sector Report January 2016

Under £15,500 275 30 28 23 20 £15,500-24,999 280 29 25 28 23 £25,000-49,999 454 30 32 26 25 £50,000 or over 173 35 29 27 32 Don't know/ Rather not say 110 21 23 25 19

Housing situation: My home is being bought on a 434 29 29 26 25 mortgage My home is owned outright 292 30 30 19 26 My home is rented from a Local 130 30 25 23 19 Authority My home is rented from a private 289 29 27 31 23 landlord My home is rented from a housing 107 30 31 30 27 association

Presence of own children: Aged 5 and under 186 30 20 21 21 Aged 6-12 229 32 31 27 25 Aged 13-17 206 29 30 28 23 Aged 13-15 131 30 31 25 24 Aged 16-17 109 28 25 33 23 Aged 18+ 152 30 36 22 25 I am not the parent/guardian of 748 30 28 27 24 any children in my household

Parent (of under-18s): Parent (of under-18s) 454 29 28 25 25 Other 838 30 29 26 24

Parent (of under-16s): Parent (of under-16s) 402 29 28 24 25 Other 890 30 29 27 23

Parent status UK: Mothers – Parent (of under-16s) 218 25 22 21 22 Fathers – Parent (of under-16s) 184 33 34 28 30

Household size: 1 188 34 23 29 21 2 369 28 30 27 23 3 286 28 30 23 27 4 292 26 28 25 24 5 or more 157 37 27 28 24

Current marital status: Non-married 577 30 27 29 23 Single 469 31 28 30 24 Married/Civil Partnership/Living 715 29 29 23 25 As Married Separated/divorced/widowed 108 24 24 28 20

Financial situation: Healthy – I have money left at the 326 30 28 24 31 end of the month for a few luxuries or to add to my savings OK – I get by, but there's not a lot 600 28 30 28 23 left by the time the basics are taken care of Tight – I'm making ends meet, but 269 30 26 24 22 only just

Gourmet Burger Sector Report January 2016

Struggling/In trouble 97* 33 28 27 19

Generations: Millennials (16-35) 602 30 28 29 24 Millennials (younger) (1990-99) 299 30 27 31 23 (16-25) Millennials (older) (1980-89) (26- 303 30 28 27 24 35) Generation X (1965-79) (36-50) 367 31 30 28 24 Baby Boomers (1946-64) (51-69) 281 27 27 18 24

* Small sub-sample (75-100) SOURCE: LIGHTSPEED GMI/MINTEL

Gourmet Burger Sector Report January 2016

Appendix - Chicken and Burger Bar Restaurant User Survey

Ask All

Separator slide 4: Now we would like to ask you some questions about fast food outlets and restaurants, focusing in particular on chicken and burger restaurants such as Burger King, KFC, Gourmet Burger Kitchen and Nandos.

Ask all

Q33. [Restaurant] Which, if any, of the following fast food outlets/restaurants have you eaten in or bought a takeaway from in the last 3 months? Please select all that apply. [multicode] [Trended with UK38 2014 Q14] [Consider for repertoire] [1] McDonald’s [2] KFC [3] Subway [4] Burger King [5] Nando’s [6] Gourmet burger bar (eg Gourmet Burger Kitchen, Haché) [7] Rotisserie chicken restaurant (eg Chicken Shop) [8] Other chicken outlet (eg Southern Fried Chicken, Chicken Cottage, Favourite Fried Chicken) [9] Other burger outlet (eg Wimpy) [10] I have not eaten in or bought a takeaway from fast food outlets/restaurants in the last 3 months [single code]

Ask all who coded 1-9 in Q33 [eaters of chicken/burger at fast food outlets/restaurants] All who code 10 in Q33 go to Q39

Q34. [Frequency] How frequently do you eat in/get a takeaway from the following fast food outlets and restaurants? Please select one answer for each outlet/restaurant. [single code per row] [Trended with 2014 - UK38 – Q15]

[Scriptors: Replicate rows based on responses at Q33]

[1] More than [3] 2-3 once a week [2] Once a [4] Once a [5] Less than once a times a week month month month

[1] McDonald’s [2] KFC [3] Subway [4] Burger King [5] Nando’s [6] Gourmet burger bar (eg Gourmet Burger Kitchen, Hache) [7] Rotisserie chicken restaurant (eg Chicken Shop) [8] Other chicken outlet (eg Southern Fried Chicken, Chicken

Gourmet Burger Sector Report January 2016

Cottage, Favourite Fried Chicken) [9] Other burger outlet (eg Wimpy)

All from Q34 to Q35 [ie eaters of chicken/burger at fast food outlets/restaurants]

Q35. [eaters behaviours] Which of the following statements, if any, apply to you? Please select all that apply. [multicode, randomize codes 1-5] [1] Meal deals at fast food restaurants make me eat more than I usually would [2] Concerns about the healthiness of fast food have caused me to limit the amount I eat [3] I have ordered healthier dishes at a fast food restaurant (eg salad, fruit) [4] I have switched from fast food restaurants to gourmet burger restaurants [5] I only eat gourmet burgers when I can afford it [6] None of these [single code, anchor]

All from Q35 to Q36 [eaters of chicken/burger at fast food outlets/restaurants]

Q36. [concerns] Thinking about the food you eat at fast food restaurants, how concerned, if at all, are you about the following? Please select one answer per concern. [Single code per row, randomize codes 1-7]

Net those [1] [2] [3] Slightly [4] Not at [5] coding Extremely Moderately concerned all Don’t columns 1-3 concerned concerned concerned know in each row as ‘Any concerned’ [1]The amount of fat in burgers [2] The amount of calories in burgers [3] The amount of fat in fried chicken [4] The amount of salt in burgers [5] The amount of artificial ingredients used [6] The quality of the meat used [7] The animal welfare standards of meat used

All from Q36 to Q37 [eaters of chicken/burger at fast food outlets/restaurants]

Q37. [interest] Which, if any, of the following would you be most interested in trying at a fast food restaurant (eg McDonald’s, Burger King etc)? Please select up to 5. [multicode, limit to 5, randomize codes 1-11]

[1] Burgers made using more premium bread (eg brioche bun) [2] A greater selection of sides (eg deep fried pickles, guacamole) [3] Grain based side dishes (eg quinoa, rice pots) [4] A greater selection of dips/sauces (eg wasabi mayonnaise)

Gourmet Burger Sector Report January 2016

[5] Burgers containing thicker meat [6] A greater selection of burger toppings (eg chorizo) [7] A greater variety of fish/shellfish dishes (eg prawns in a crispy coating, Thai fishcake) [8] A greater variety of vegetarian burgers (eg Quorn burger, Portobello mushroom burger) [9] Different types of meat burger (eg pork, lamb, turkey) [10] Mini chicken, beef or veggie burgers (eg sliders) [11] Ethnic-style dishes (eg falafel ‘nuggets’) [12] None of these [single code, anchor]

All from Q37 to Q38 [eaters of chicken/burger at fast food outlets/restaurants]

Q38. [Attitudes] To what extent do you agree or disagree with each of the following statements? Please select one per statement. [single code per row, randomize codes 1-12] [Internal note: cluster analysis]

[1] [2] [3] [4] [5] Strongl Agree Neither Disagre Strongly y agree agree or e disagree disagree Interest in something new (Do not display)

[1] Burger restaurants should have the option to cook beef burgers rare [2] I would prefer to place an order in a fast food restaurant via an electronic device (eg a tablet) than to order at the counter [3] I would be interested in ordering home delivery from a fast food restaurant chain (eg McDonalds, Burger King) [4] The ability to design my your own sauce (eg mixing chilli sauce with mayo) in restaurants would appeal to me [5] I would be interested in trying gourmet burgers at fast food chains (eg McDonald’s) Menu choices (Do not display) [6] I tend to order traditional menu items (eg beef or chicken burgers, whole fried chicken pieces) at fast food restaurants [7] The cut of meat used in chicken burgers (eg boneless thigh, breast of chicken etc) is of no concern to me [8] The quality of hot drinks served at fast food restaurants is worse than coffee served at mainstream coffee shops (eg Costa, Starbucks)

Health concerns (Do not display) [9] I would rather eat a smaller portion of my favourite meal in a fast food restaurant (eg a mini Big Mac) than a reduced calorie version [10] If I had more money I would eat at other food outlets/restaurants more instead of fast food restaurants [11] Gourmet burgers (eg from Gourmet Burger Kitchen) are better for you than burgers from a fast food restaurant

[12] Grilled/flame-grilled chicken (eg Nando’s) is healthier than fried chicken (eg KFC)

NET: Any Agree (columns 1-2) NET: Any disagree (columns 4-5)

Gourmet Burger Sector Report January 2016

Ask all

Separator slide: We are now going to change the subject slightly and ask your opinion on eating in/takeaway food in general.

Ask all

Q39. [correspondence map] Which, if any, of the following qualities do you associate with each of the following restaurant/takeaway brands? Please select all that apply for each brand. [Multicode per column, randomize codes 1-11] [scriptors, please show each column on a different page]

[1] McDonald’s [2] KFC [3] [4] Pret-a- [5] Starbucks Subway Manger [1] Affordable [2] Unhealthy [3] Good if you’re in a rush [4] Good range of products [5] Child-friendly [6] Food doesn’t feel freshly made [7] Ethical [8] Processed food [9] A good place to socialise [10] Good quality ingredients [11] None of these [single code]

Ask all 18+

Gourmet Burger Sector Report January 2016

Appendix - Beef Burger Foodservice Consumer Survey Data The data in this section draws from consumer research commissioned by Mintel. Research was carried out by Lightspeed GMI among 2,000 internet users aged 16+ in October 2015.

Beef burger uptake FIGURE 36: BEEF BURGER UPTAKE AT FOODSERVICE VENUES IN THE PAST THREE MONTHS, OCTOBER 2015

"Have you eaten a beef burger from a restaurant, fast food venue/van, pub or takeaway in the last 3 months?"

Base: 2,000 internet users aged 16+

% Yes 46 No 54 Don't know 1

SOURCE: LIGHTSPEED GMI/MINTEL

FIGURE 37: BEEF BURGER UPTAKE AT FOODSERVICE VENUES IN THE PAST THREE MONTHS, BY DEMOGRAPHICS, OCTOBER 2015

"Have you eaten a beef burger from a restaurant, fast food venue/van, pub or takeaway in the last 3 months?"

Base: 2,000 internet users aged 16+

All Yes No Don't know N % % % Total 2,000 46 54 1

Gender: Male 997 50 50 1 Female 1,003 42 57 1

Age: 16-24 327 57 40 2 25-34 380 56 43 1 35-44 368 52 48 1 45-54 377 47 52 1 55+ 548 26 74 0 16-34 707 57 42 1 35-44 368 52 48 1 45-64 658 41 58 0 65+ 267 19 81 0 16-44 1075 55 44 1 45+ 925 35 65 0 18-24 261 59 39 3 25-34 380 56 43 1 35-44 368 52 48 1 45-54 377 47 52 1 55+ 548 26 74 0

Gourmet Burger Sector Report January 2016

Gender by Age: Male 16-24 166 62 36 2 Male 25-44 371 57 43 1 Male 45-64 326 46 53 1 Male 65+ 134 23 77 0 Female 16-24 161 53 45 2 Female 25-44 377 52 48 0 Female 45-64 332 37 63 0 Female 65+ 133 14 86 0

Region: Scotland 171 37 61 1 North East 84* 42 55 4 North West 228 47 53 0 Yorkshire & Humberside 171 41 58 1 East Midlands 148 43 55 3 West Midlands 182 51 48 1 Inner & Greater London 270 60 40 0 South East/East Anglia 474 44 55 0 South West 173 39 61 0 Wales 99* 42 57 1

Region: Scotland 171 37 61 1 North East/North West 312 46 53 1 Yorkshire & Humberside 171 41 58 1 East Midlands 148 43 55 3 West Midlands 182 51 48 1 Inner & Greater London 270 60 40 0 South East/East Anglia 474 44 55 0 South West/Wales 272 40 59 0

Area: Urban location (ie living in a town/city) 783 53 46 1 Suburban/Village/rural 1,217 41 58 1 Suburban location (ie close to town/city but living outside 826 42 57 1 a town/city) Village/rural location 391 38 61 1

Working status: Employed 1,015 53 46 1 Employee full-time (30+ hours/week) 734 55 45 1 Employee part-time (less than 30 hours/week) 281 50 49 1 Self-Employed 128 47 52 1 In full-time education 165 57 42 1 Retired 339 21 79 0 Not working for any other reason 353 42 56 2

Socio-economic group A 111 59 41 0 B 335 45 55 0 C1 618 46 54 1 C2 418 50 49 1 D 264 47 52 1 E 254 33 66 2 AB 446 48 51 0 C12 1036 47 52 1 DE 518 40 59 1 ABC1 1064 47 53 0 C2DE 936 44 54 1

Highest level of qualification: No formal qualification 107 36 63 2

Gourmet Burger Sector Report January 2016

GCSE/O-level or equivalent 506 48 52 0 AS/A-level or equivalent 324 50 49 1 Vocational qualification (eg NVQs, BTEC etc) 312 41 59 0 Further qualification (HNC, HND etc) 145 46 54 0 University degree (including undergraduate and master’s 537 45 54 1 degrees) University degree/doctorate level or professional equivalent 571 46 53 1

Gross annual household income: Under £9,500 194 40 60 0 £9,500 - £15,499 296 40 59 1 £15,500 - £24,999 399 46 53 1 £25,000 - £49,999 648 48 51 1 £50,000 - £74,999 176 56 44 0 £75,000 or over 83 * 63 37 0 Don't know 77 * 43 56 1 Rather not say 127 33 65 2 Under £15,500 490 40 60 1 £15,500 - 24,999 399 46 53 1 £25,000 - 49,999 648 48 51 1 £50,000 or over 259 58 42 0 Don't know/Rather not say 204 37 62 1

Housing situation: My home is being bought on a mortgage 650 52 48 0 My home is owned outright 574 37 63 1 My home is rented from a Local Authority 184 50 49 1 My home is rented from a private landlord 376 48 51 1 My home is rented from a housing association 172 47 53 0 Other 44 * 39 57 5

Presence of own children: Aged 5 and under 200 66 33 1 Aged 6-12 278 65 33 1 Aged 13-17 292 55 45 0 Aged 13-15 182 59 41 1 Aged 16-17 167 51 48 1 Aged 18+ 261 45 55 0 I am not the parent/guardian of any children in my 1,249 40 59 1 household

Parent (of under-18s): Parent (of under-18s) 578 59 40 1 Other 1,422 40 59 1

Parent (of under-16s): Parent (of under-16s) 502 61 38 1 Other 1,498 41 59 1

Parent status UK: Mothers - Parent (of under-16s) 276 57 42 1 Fathers - Parent (of under-16s) 226 66 33 0

Household size: 1 354 36 62 2 2 659 37 63 0 3 446 49 50 1 4 355 59 41 0 5 or more 186 63 36 1

Current marital status: Non-Married 876 45 54 1

Gourmet Burger Sector Report January 2016

Single 665 49 50 1 Married/Civil Partnership/Living As Married 1,124 47 53 0 Separated/Divorced/Widowed 211 32 67 1

Financial situation: Healthy - I have money left at the end of the month for a 457 45 54 1 few luxuries or to add to my savings OK - I get by, but there's not a lot left by the time the 926 47 52 1 basics are taken care of Tight - I'm making ends meet, but only just 442 45 55 0 Struggling / In trouble 175 46 54 1

Generation: Millennials (16-35) 747 58 41 1 Millennials (younger) (1990-1999) (16-25) 359 58 40 2 Millennials (older) (1980-1989) (26-35) 388 57 42 1 Generation X (1965-1979) (36-50) (T5) 540 50 49 1 Baby Boomers (1946-1964) (51-69) 586 33 67 0 Swing Generation/World War II (1945 or before) (70+) 127 18 82 0

* Small sub-sample (75-100) SOURCE: LIGHTSPEED GMI/MINTEL

Venues for eating beef burgers

FIGURE 38: VENUES FROM WHICH DINERS HAVE EATEN BEEF BURGERS IN THE PAST THREE MONTHS, OCTOBER 2015

"From which of the following venues have you eaten beef burgers in the last 3 months?"

Base: 915 internet users 16+ who have eaten a beef burger from a restaurant, fast food venue/van, pub or takeaway in the last 3 months

ALL % Fast food outlet (eg McDonald's, Burger King, kebab 71 shop) Gourmet burger outlet (eg GBK, Byron) 18 Other restaurant (eg Bella Italia, Café Rouge) 14 Pub 27 Street food van (eg burger van) 13 Other foodservice venue 4

SOURCE: LIGHTSPEED GMI/MINTEL

FIGURE 39: MOST POPULAR VENUES FROM WHICH DINERS HAVE EATEN BEEF BURGERS IN THE PAST THREE MONTHS, BY DEMOGRAPHICS, OCTOBER 2015

"From which of the following venues have you eaten beef burgers in the last 3 months?"

Base: 915 internet users 16+ who have eaten a beef burger from a restaurant, fast food venue/van, pub or takeaway in the last 3 months

All Fast food outlet Gourmet burger Other (eg McDonald's, outlet (eg GBK, restaurant (eg Burger King, Byron) Bella Italia, kebab shop) Café Rouge) N % % % Total 915 71 18 14

Gourmet Burger Sector Report January 2016

Gender: Male 494 70 20 13 Female 421 71 15 14

Age: 16-24 188 69 24 17 16-34 402 69 24 19 16-44 593 71 22 16 25-34 214 69 25 20 35-44 191 74 17 10 45-54 177 79 11 7 45+ 322 71 10 10 55+ 145 61 8 12

Gender by age: Male 16-24 103 68 26 16 Male 25-44 210 70 26 16 Male 45-64 150 75 11 7 Male 45+ 181 72 10 9 Female 16-24 85 * 71 21 19 Female 25-44 195 73 16 15 Female 45-64 122 72 9 11 Female 45+ 141 70 9 11

Region: Scotland and the North 207 76 14 12 Yorkshire & Humberside 70 * 69 17 9 The Midlands 156 72 16 17 Inner & Greater London 163 69 23 18 South East/East Anglia 209 71 17 12 South West/Wales 110 63 20 13

Area: Urban location (ie living in a town/city) 418 70 20 17 Suburban/village/rural 497 72 16 11 Suburban location (ie close to town/city but 347 71 17 12 living outside a town/city) Village/rural location 150 73 14 9

Working status: Employed/self-employed 603 71 20 15 Employed 543 72 20 14 Employee full-time (30+ hours/week) 402 71 23 15 Employee part-time (less than 30 141 74 11 12 hours/week) In full-time education 94 * 72 23 18 Retired/not working for any other reason 218 69 8 9 Not working for any other reason 147 76 8 7

Socio-economic group: B 150 65 27 16 C1 283 68 21 16 C2 208 76 12 14 D 125 78 7 9 E 83 * 77 7 5 AB 216 64 29 16 C12 491 71 17 15 DE 208 77 7 7 ABC1 499 66 24 16 C2DE 416 77 10 11

Highest level of qualification:

Gourmet Burger Sector Report January 2016

No formal qualification/GCSE/O-level or 279 74 9 9 equivalent GCSE/O-level or equivalent 241 73 10 9 AS/A-level or equivalent 162 70 20 19 Vocational qualification (eg NVQs, BTEC 195 72 15 9 etc)/Further qualification (HNC, HND etc) Vocational qualification (eg NVQs, BTEC 128 74 8 11 etc) University degree/doctorate level or 261 68 26 18 professional equivalent University degree (including undergraduate 244 68 27 19 and master's degrees)

Gross annual household income: Under £15,500 194 72 12 11 £15,500 - 24,999 184 73 14 17 £25,000 - 49,999 311 72 18 13 £50,000 or over 151 68 28 17 Don't know/Rather not say 75 * 67 21 11

Housing situation: My home is being bought on a mortgage 336 69 21 13 My home is owned outright 210 66 16 18 My home is rented from a Local Authority 92 * 85 8 8 My home is rented from a private landlord 179 70 19 15 My home is rented from a housing 81 * 79 14 10 association

Presence of own children: Aged 5 and under 132 73 23 18 Aged 6-12 182 80 20 15 Aged 13-17 160 78 14 11 Aged 13-15 107 79 19 11 Aged 16-17 86 * 81 6 13 Aged 18+ 117 76 10 11 I am not the parent/guardian of any children 501 67 18 13 in my household

Parent (of under-18s): Parent (of under-18s) 343 76 19 14 Other 572 68 17 13

Parent (of under-16s): Parent (of under-16s) 308 76 20 15 Other 607 68 16 13

Parent status UK: Mothers – Parent (of under-16s) 158 78 13 15 Fathers – Parent (of under-16s) 150 74 28 15

Household size: 1 127 68 13 10 2 244 66 17 13 3 217 69 18 17 4 210 76 20 12 5 or more 117 81 20 15

Current marital status: Non-Married 390 72 19 14 Single/Separated/Divorced/Widowed 390 72 19 14 Single 323 71 20 15 Married/Civil Partnership/Living As Married 525 70 17 14

Gourmet Burger Sector Report January 2016

Financial situation: Healthy - I have money left at the end of the 205 61 26 19 month for a few luxuries or to add to my savings OK - I get by, but there's not a lot left by the 433 72 18 15 time the basics are taken care of Tight - I'm making ends meet, but only just 197 77 12 7 Struggling / In trouble 80 * 73 11 8

Generations: Millennials (16-35) 431 71 24 19 Millennials (younger) (1990-99) (16-25) 208 69 23 17 Millennials (older) (1980-89) (26-35) 223 72 25 20 Generation X (1965-79) (36-50) 269 75 15 7 Baby Boomers(1946-64) (51-69) /Swing 215 67 9 12 Generation/World War II (1945 or before) (70+) Baby Boomers (1946-64) (51-69) 192 67 9 11

* Small sub-sample (75-100) SOURCE: LIGHTSPEED GMI/MINTEL

FIGURE 40: NEXT MOST POPULAR VENUES FROM WHICH DINERS HAVE EATEN BEEF BURGERS IN THE PAST THREE MONTHS, BY DEMOGRAPHICS, OCTOBER 2015

"From which of the following venues have you eaten beef burgers in the last 3 months?"

Base: 915 internet users 16+ who have eaten a beef burger from a restaurant, fast food venue/van, pub or takeaway in the last 3 months

All Pub Street food Other van (eg foodservice burger van) venue N % % % Total 915 27 13 4

Gender: Male 494 28 15 5 Female 421 26 11 3

Age: 16-24 188 26 12 5 16-34 402 30 14 4 16-44 593 30 14 4 25-34 214 33 17 3 35-44 191 29 13 4 45-54 177 20 13 3 45+ 322 23 12 4 55+ 145 27 10 6

Gender by age: Male 16-24 103 30 13 5 Male 25-44 210 30 17 4 Male 45-64 150 27 13 5 Male 45+ 181 25 13 5 Female 16-24 85 * 21 11 5 Female 25-44 195 32 12 3 Female 45-64 122 19 11 2 Female 45+ 141 20 10 3

Region:

Gourmet Burger Sector Report January 2016

Scotland and the North 207 24 14 2 Yorkshire & Humberside 70 * 23 17 4 The Midlands 156 34 13 6 Inner & Greater London 163 26 11 4 South East/East Anglia 209 26 11 4 South West/Wales 110 30 15 5

Area: Urban location (ie living in a town/city) 418 26 12 5 Suburban/village/rural 497 29 14 3 Suburban location (ie close to town/city but 347 29 14 3 living outside a town/city) Village/rural location 150 27 13 3

Working status: Employed/self-employed 603 27 14 3 Employed 543 27 15 3 Employee full-time (30+ hours/week) 402 26 15 3 Employee part-time (less than 30 141 28 13 4 hours/week) In full-time education 94 * 23 14 6 Retired/not working for any other reason 218 30 9 6 Not working for any other reason 147 29 10 6

Socio-economic group: B 150 30 15 4 C1 283 26 8 2 C2 208 26 19 4 D 125 24 11 6 E 83 * 33 10 5 AB 216 30 16 4 C12 491 26 13 3 DE 208 27 11 6 ABC1 499 27 12 3 C2DE 416 27 15 5

Highest level of qualification: No formal qualification/GCSE/O-level or 279 25 15 4 equivalent GCSE/O-level or equivalent 241 27 16 3 AS/A-level or equivalent 162 20 8 6 Vocational qualification (eg NVQs, BTEC 195 28 12 5 etc)/Further qualification (HNC, HND etc) Vocational qualification (eg NVQs, BTEC 128 28 13 5 etc) University degree/doctorate level or 261 34 16 2 professional equivalent University degree (including undergraduate 244 35 15 2 and master's degrees)

Gross annual household income: Under £15,500 194 23 16 6 £15,500 - 24,999 184 24 11 4 £25,000 - 49,999 311 31 13 4 £50,000 or over 151 27 14 2 Don't know/Rather not say 75 * 28 11 4

Housing situation: My home is being bought on a mortgage 336 29 13 3 My home is owned outright 210 30 12 4 My home is rented from a Local Authority 92 * 17 16 1 My home is rented from a private landlord 179 28 15 5 My home is rented from a housing 81 * 20 11 6

Gourmet Burger Sector Report January 2016

association

Presence of own children: Aged 5 and under 132 35 18 2 Aged 6-12 182 29 17 2 Aged 13-17 160 28 18 1 Aged 13-15 107 30 20 1 Aged 16-17 86 * 24 16 1 Aged 18+ 117 19 11 7 I am not the parent/guardian of any children 501 29 12 4 in my household

Parent (of under-18s): Parent (of under-18s) 343 27 16 2 Other 572 27 11 5

Parent (of under-16s): Parent (of under-16s) 308 28 17 2 Other 607 27 11 5

Parent status UK: Mothers – Parent (of under-16s) 158 28 14 1 Fathers – Parent (of under-16s) 150 29 19 4

Household size: 1 127 28 11 3 2 244 29 11 4 3 217 22 13 7 4 210 28 15 1 5 or more 117 32 15 3

Current marital status: Non-Married 390 28 12 5 Single/Separated/Divorced/Widowed 390 28 12 5 Single 323 28 13 4 Married/Civil Partnership/Living As Married 525 26 14 3

Financial situation: Healthy - I have money left at the end of the 205 31 15 2 month for a few luxuries or to add to my savings OK - I get by, but there's not a lot left by the 433 27 12 4 time the basics are taken care of Tight - I'm making ends meet, but only just 197 25 12 5 Struggling / In trouble 80 * 23 18 8

Generations: Millennials (16-35) 431 30 14 4 Millennials (younger) (1990-99) (16-25) 208 26 12 4 Millennials (older) (1980-89) (26-35) 223 34 16 4 Generation X (1965-79) (36-50) 269 25 14 3 Baby Boomers(1946-64) (51-69) /Swing 215 24 10 5 Generation/World War II (1945 or before) (70+) Baby Boomers (1946-64) (51-69) 192 23 11 5

* Small sub-sample (75-100) SOURCE: LIGHTSPEED GMI/MINTEL

Gourmet Burger Sector Report January 2016

Preferred cooking level of beef burgers

FIGURE 41: PREFERRED COOKING LEVEL OF A BEEF BURGER, OCTOBER 2015

"Thinking about your perfect beef burger, how would you prefer to have it cooked?"

Base: 915 internet users 16+ who have eaten a beef burger from a restaurant, fast food venue/van, pub or takeaway in the last 3 months ALL % Well-done (cooked through) 59 Medium (possible pink streaks inside) 27 Medium-rare (pink in the middle) 10 Rare (pink/red in the middle) 1 I don't have a preference 2

SOURCE: LIGHTSPEED GMI/MINTEL

FIGURE 42: PREFERRED COOKING LEVEL OF A BEEF BURGER, BY DEMOGRAPHICS, OCTOBER 2015

"Thinking about your perfect beef burger, how would you prefer to have it cooked?"

Base: 915 internet users 16+ who have eaten a beef burger from a restaurant, fast food venue/van, pub or takeaway in the last 3 months

All Well-done Medium Medium- Rare I don't have (cooked (possible rare (pink in (pink/red a through) pink streaks the middle) in the preference inside) middle) N % % % % % Total 915 59 27 10 1 2

Gender: Male 494 56 29 11 2 3 Female 421 63 25 10 1 1

Age: 16-24 188 55 27 16 1 2 16-34 402 54 29 14 1 1 16-44 593 53 29 14 2 2 25-34 214 53 32 12 2 1 35-44 191 52 29 13 3 3 45-54 177 68 24 6 1 2 45+ 322 70 22 4 1 2 55+ 145 73 21 3 0 3

Gender by age: Male 16-24 103 58 22 17 2 1 Male 25-44 210 46 36 13 3 2 Male 45-64 150 65 25 5 1 3 Male 45+ 181 66 24 5 1 4 Female 16-24 85 * 51 32 15 0 2 Female 25-44 195 59 25 12 2 2 Female 45-64 122 72 23 4 0 1 Female 45+ 141 75 21 4 0 1

Region: Scotland and the North 207 64 23 9 2 2 North West 108 69 20 8 0 3

Gourmet Burger Sector Report January 2016

Yorkshire & Humberside 70 * 57 31 10 0 1 The Midlands 156 59 24 9 4 4 Inner & Greater London 163 61 23 13 1 2 South East/East Anglia 209 55 33 11 0 0 South West/Wales 110 58 28 11 1 2

Area: Urban location (ie living in a 418 60 27 10 1 3 town/city) Suburban/village/rural 497 59 27 11 2 1 Suburban location (ie close to 347 57 28 13 1 1 town/city but living outside a town/city) Village/rural location 150 62 26 7 3 2

Working status: Employed/self-employed 603 54 29 12 2 2 Employed 543 53 30 13 2 3 Employee full-time (30+ 402 50 32 14 2 2 hours/week) Employee part-time (less than 141 64 23 9 1 3 30 hours/week) In full-time education 94 * 61 26 13 0 1 Retired/not working for any 218 72 21 5 0 1 other reason Not working for any other 147 67 24 7 1 1 reason

Socio-economic group: B 150 53 31 11 3 2 C1 283 52 28 17 1 2 C2 208 66 23 7 1 3 D 125 66 23 7 1 2 E 83 * 67 27 4 1 1 AB 216 55 31 10 2 1 C12 491 58 26 12 1 2 DE 208 67 25 6 1 2 ABC1 499 53 29 14 2 2 C2DE 416 66 24 6 1 3

Highest level of qualification: No formal qualification/GCSE/ 279 71 22 5 0 1 O-level or equivalent GCSE/O-level or equivalent 241 71 23 5 0 1 AS/A-level or equivalent 162 53 33 9 1 3 Vocational qualification (eg 195 59 26 9 2 4 NVQs, BTEC etc)/Further qualification (HNC, HND etc) Vocational qualification (eg 128 59 24 9 2 5 NVQs, BTEC etc) University degree/doctorate 261 50 30 17 2 1 level or professional equivalent University degree (including 244 49 31 16 2 1 undergraduate and master's degrees)

Gross annual household income: Under £15,500 194 67 24 6 2 1 £15,500 - 24,999 184 61 23 10 1 4 £25,000 - 49,999 311 58 28 10 1 3 £50,000 or over 151 47 34 17 2 0 Don't know/Rather not say 75 * 64 23 9 3 1

Gourmet Burger Sector Report January 2016

Housing situation: My home is being bought on a 336 49 35 13 1 2 mortgage My home is owned outright 210 74 18 5 1 2 My home is rented from a Local 92 * 71 17 9 2 1 Authority My home is rented from a 179 53 27 16 2 2 private landlord My home is rented from a 81 * 64 27 5 0 4 housing association

Presence of own children: Aged 5 and under 132 57 27 12 2 2 Aged 6-12 182 58 28 11 1 2 Aged 13-17 160 64 28 5 1 1 Aged 13-15 107 64 29 5 2 1 Aged 16-17 86 * 62 33 5 0 1 Aged 18+ 117 65 24 8 0 3 I am not the parent/guardian of 501 59 26 11 2 2 any children in my household

Parent (of under-18s): Parent (of under-18s) 343 59 29 9 1 1 Other 572 60 25 11 1 3

Parent (of under-16s): Parent (of under-16s) 308 58 30 9 2 1 Other 607 60 26 11 1 2

Parent status UK: Mothers – Parent (of under-16s) 158 68 24 7 0 1 Fathers – Parent (of under-16s) 150 48 35 12 3 1

Household size: 1 127 62 24 9 2 3 2 244 59 27 12 2 1 3 217 61 22 12 2 3 4 210 54 34 10 1 2 5 or more 117 63 27 8 0 2

Current marital status: Non-Married 390 60 27 11 1 2 Single/Separated/Divorced/ 390 60 27 11 1 2 Widowed Single 323 59 26 12 1 2 Married/Civil Partnership/Living 525 59 27 10 2 2 As Married

Financial situation: Healthy - I have money left at 205 59 27 9 3 2 the end of the month for a few luxuries or to add to my savings OK - I get by, but there's not a 433 57 29 12 1 1 lot left by the time the basics are taken care of Tight - I'm making ends meet, 197 67 23 8 0 2 but only just Struggling / In trouble 80 * 56 24 10 3 8

Generations: Millennials (16-35) 431 54 29 14 1 2 Millennials (younger) (1990-99) 208 55 27 15 1 1

Gourmet Burger Sector Report January 2016

(16-25) Millennials (older) (1980-89) 223 54 30 13 1 2 (26-35) Generation X (1965-79) (36-50) 269 58 28 10 3 2 Baby Boomers(1946-64) (51- 215 71 22 4 0 3 69) /Swing Generation/World War II (1945 or before) (70+) Baby Boomers (1946-64) (51- 192 69 23 4 0 3 69)

* Small sub-sample (75-100) SOURCE: LIGHTSPEED GMI/MINTEL

Medium or rare beef burger consumption

FIGURE 43: EATING MEDIUM OR RARE BEEF BURGERS FROM FOODSERVICE VENUES IN THE LAST TWO WEEKS, OCTOBER 2015 “Have you eaten a medium or rare beef burger from a restaurant, fast food venue/van, pub or takeaway in the last 2 weeks?”

Base: 915 internet users 16+ who have eaten a beef burger from a restaurant, fast food venue/van, pub or takeaway in the last 3 months

ALL % Yes 26 No 74

SOURCE: LIGHTSPEED GMI/MINTEL

FIGURE 44: EATING MEDIUM OR RARE BEEF BURGERS FROM FOODSERVICE VENUES IN THE LAST TWO WEEKS, BY DEMOGRAPHICS, OCTOBER 2015 “Have you eaten a medium or rare beef burger from a restaurant, fast food venue/van, pub or takeaway in the last 2 weeks?”

Base: 915 internet users 16+ who have eaten a beef burger from a restaurant, fast food venue/van, pub or takeaway in the last 3 months

All Yes No N % % Total 915 26 74

Gender: Male 494 28 72 Female 421 24 76

Age: 16-24 188 32 68 16-34 402 35 65 16-44 593 32 68 25-34 214 38 62 35-44 191 24 76 45-54 177 21 79 45-64 272 17 83 45+ 322 16 84 55+ 145 9 91

Gender by age:

Gourmet Burger Sector Report January 2016

Male 16-24 103 35 65 Male 25-44 210 36 64 Male 45-64 150 15 85 Male 45+ 181 14 86 Female 16-24 85 * 29 71 Female 25-44 195 26 74 Female 45-64 122 20 80 Female 45+ 141 17 83

Region: Scotland and the North 207 23 77 Yorkshire & Humberside 70 * 23 77 The Midlands 156 29 71 Inner & Greater London 163 34 66 South East/East Anglia 209 25 75 South West/Wales 110 19 81

Area: Urban location (ie living in a town/city) 418 32 68 Suburban/village/rural 497 21 79 Suburban location (ie close to town/city but living outside a 347 24 76 town/city) Village/rural location 150 14 86

Working status: Employed/self-employed 603 31 69 Employed 543 31 69 Employee full-time (30+ hours/week) 402 34 66 Employee part-time (less than 30 hours/week) 141 21 79 In full-time education 94 * 29 71 Retired/not working for any other reason 218 11 89 Not working for any other reason 147 14 86

Socio-economic group: B 150 31 69 C1 283 28 72 C2 208 25 75 D 125 20 80 E 83 * 11 89 AB 216 32 68 C12 491 27 73 DE 208 16 84 ABC1 499 30 70 C2DE 416 21 79

Highest level of qualification: No formal qualification/GCSE/O-level or equivalent 279 19 81 GCSE/O-level or equivalent 241 19 81 AS/A-level or equivalent 162 30 70 Vocational qualification (eg NVQs, BTEC etc)/Further 195 21 79 qualification (HNC, HND etc) Vocational qualification (eg NVQs, BTEC etc) 128 18 82 University degree/doctorate level or professional equivalent 261 34 66 University degree (including undergraduate and master's 244 35 65 degrees)

Gross annual household income: Under £15,500 194 25 75 £15,500 - 24,999 184 28 72 £25,000 - 49,999 311 25 75 £50,000 or over 151 31 69 Don't know/Rather not say 75 * 17 83

Gourmet Burger Sector Report January 2016

Housing situation: My home is being bought on a mortgage 336 27 73 My home is owned outright 210 20 80 My home is rented from a Local Authority 92 * 26 74 My home is rented from a private landlord 179 30 70 My home is rented from a housing association 81 * 26 74

Presence of own children: Aged 5 and under 132 31 69 Aged 6-12 182 33 67 Aged 13-17 160 28 72 Aged 13-15 107 30 70 Aged 16-17 86 * 27 73 Aged 18+ 117 17 83 I am not the parent/guardian of any children in my household 501 24 76

Parent (of under-18s): Parent (of under-18s) 343 30 70 Other 572 23 77

Parent (of under-16s): Parent (of under-16s) 308 31 69 Other 607 23 77

Parent status UK: Mothers – Parent (of under-16s) 158 25 75 Fathers – Parent (of under-16s) 150 37 63

Household size: 1 127 24 76 2 244 22 78 3 217 26 74 4 210 28 72 5 or more 117 32 68

Current marital status: Non-Married 390 26 74 Single/Separated/Divorced/Widowed 390 26 74 Single 323 28 72 Married/Civil Partnership/Living As Married 525 26 74

Financial situation: Healthy - I have money left at the end of the month for a few 205 35 65 luxuries or to add to my savings OK - I get by, but there's not a lot left by the time the basics 433 26 74 are taken care of Tight - I'm making ends meet, but only just 197 18 82 Struggling / In trouble 80 * 23 78

Generations: Millennials (16-35) 431 34 66 Millennials (younger) (1990-99) (16-25) 208 34 66 Millennials (older) (1980-89) (26-35) 223 34 66 Generation X (1965-79) (36-50) 269 24 76 Baby Boomers(1946-64) (51-69) /Swing Generation/World 215 12 88 War II (1945 or before) (70+) Baby Boomers (1946-64) (51-69) 192 14 86

* Small sub-sample (75-100) SOURCE: LIGHTSPEED GMI/MINTEL

Gourmet Burger Sector Report January 2016

Appendix - Beef Burger Foodservice Consumer Survey

Separator slide: We’d now like to change the subject slightly and ask you about eating beef burgers from restaurants, fast food venues/vans, pubs and takeaways.

Ask all aged 16+

Q36. Have you eaten a beef burger from a restaurant, fast food venue/van, pub or takeaway in the last 3 months? [Single code]

[1] Yes [2] No [3] Don't know

All who code 1 in Q36 (foodservice beef burger eaters) All who code in 2-3 at Q36 go to separator slide 5

Q37 From which of the following venues have you eaten beef burgers in the last 3 months? Please select all that apply. [Multicode, randomize 1-5 but keep 2 and 3 together]

[1] Fast food outlet (eg McDonald's, Burger King, kebab shop) [2] Gourmet burger outlet (eg GBK, Byron) [3] Other restaurant (eg Bella Italia, Café Rouge) [4] Pub [5] Street food van (eg burger van) [6] Other foodservice venue [Please specify] [Anchor]

All from Q37 go to Q38 (foodservice beef burger eaters)

Q38. Thinking about your perfect beef burger, how would you prefer to have it cooked? Please select one. [Single code]

[1] Well-done (cooked through) [2] Medium (possible pink streaks inside) [3] Medium-rare (pink in the middle) [4] Rare (pink/red in the middle) [5] I don't have a preference

All from Q38 to Q39

Q39. Why do you prefer to have your beef burgers cooked [insert pipe from Q38 – ensure to decapitalise the first letter. If coding in 5 – ‘Why do you not have a preference about how your beef burgers are cooked]? [Open ended question]

All from Q39 to Q40

Gourmet Burger Sector Report January 2016

Q40. Have you eaten a medium or rare beef burger from a restaurant, fast food venue/van, pub or takeaway in the last 2 weeks? Please select one. [Single code] [1] Yes [2] No